Lecture Notes: Rational Choice Theory and Exchange Theory

Introduction

• Focus on the economic perspective.
• Assumption: People are motivated by self-interest and personal gain.

Rational Choice Theory

• Core Idea: People act logically to maximize personal benefit.
• Rationality: Weighing costs and benefits to maximize gain.
• Assumptions:
  1. Completeness: Every action can be ranked; no equal value among options.
  2. Transitivity: If A > B and B > C, then A > C.
  3. Independence of Irrelevant Alternatives: Introduction of a new option does not alter existing preference order.
• Application: Explains social change and institutions by individual rational actions.

Exchange Theory

• Application: Rational choice in social interactions.
• Focus: Interactions are based on rewards and punishments.
• Examples: Used in family and work relationships, partner selection, parenting.
• Principles:
  • Behavior repeated if rewarded and avoided if punished.
  • Frequent rewards lose value over time (similar to supply and demand).
  • Interactions are guided by social norms.
  • Assumes access to necessary information for rational choices.
  • Fulfillment derives from social interactions and interdependence.
  • Standards for evaluation of interaction vary over time and between individuals.

Nature of Interactions

• Motivation by self-interest and interdependence.
• Relationships are formed to benefit oneself and due to reliance on others.
• Society determines acceptable behavior through rules, norms, and values.

Criticisms of Rational Choice and Exchange Theory

• General Criticisms:
  • Questioning the rationality of all human decisions.
  • Influence of social factors like gender, ethnicity, and social class.
  • Altruistic behavior challenges self-interest motive (e.g., taxes, volunteering).
• Specific to Exchange Theory:
  • Reduction of interactions to pros and cons analysis.
  • Non-linear nature of forming relationships.

Conclusion

• Both theories aim to explain individual and social interactions through rational decisions.
• Emphasis on self-interest and mutual dependence in guiding behavior.