Rational Choice Requiem: The Decline of an Economic Paradigm and its Implications for Sociology

Abstract

The paper proposes and shows that standard rational choice theory has experienced a certain degree of breakdown or crisis in much of contemporary economic science, especially social, institutional, and related economics. It identifies and considers several instances of standard rational choice theory’s breakdown in modern economics. They are, first, the end or discredit of homo economicus, second, the rejection of the premise of exclusive economic motivation, including egoism, third, the refutation of the assumption of fixed ‘natural’ tastes and preferences, and fourth, the replacement of the conception of perfect rationality. Consequently, the paper suggests that much of contemporary economics tends to move toward a more complex and realistic post-rational and in part irrational choice theory. The paper also discusses the possible implications of this trend in contemporary economics for rational choice sociology. It concludes that the continuing expansion of rational choice theory to sociology and related social sciences may not be sustainable indefinitely if the trend continues toward its breakdown in parts of contemporary economics.