Ra­tio­nal choice the­ory

Panay News - - REGION - By Ilyn F. Tabaquirao, Barangay Na­suno­gan, Dao, Capiz

WE CON­SCIOUSLY and un­con­sciously know that we al­ways have a choice – what to eat, what clothes to wear, which job of­fer to grab, who to marry, and when to set­tle, among oth­ers.

Left­ists who choose to stay in the shadow of thick forests and get a per­spec­tive of the coun­try’s con­di­tions be­low have the right to do so. How peo­ple can over­throw a dic­ta­tor or be ma­nip­u­lated by him for what­ever re­sult they would like for this coun­try, it’s their choice.

But what is ra­tio­nal choice the­ory and how sig­nif­i­cant it is as a re­flec­tion point of our ac­tions today?

Many of our in­di­vid­ual choices are some­times de­cided on a whim. There are also half-hearted choices. There are also over­whelm­ing choices, or over­due choices, or de­layed choices, or lost choices. And most of the time, they are il­log­i­cal choices.

Ra­tio­nal choice the­ory is ac­tu­ally an eco­nomic prin­ci­ple that states that in­di­vid­u­als al­ways make pru­dent and log­i­cal de­ci­sions. Out of the sev­eral times that we had to make choices, how many of those where ra­tio­nal ones?

The the­ory states that we can only reap great ben­e­fits and achieve sat­is­fac­tion from ra­tio­nal de­ci­sions. Most main­stream aca­demic as­sump­tions and the­o­ries are based on ra­tio­nal choice the­ory, and should only be based on care­ful thought and log­i­cal stud­ies.

Ra­tio­nal choice the­ory as­sumes that all peo­ple try to ac­tively max­i­mize their ad­van­tage in any sit­u­a­tion and there­fore con­sis­tently try to min­i­mize their losses. The the­ory is based on the idea that all hu­mans base their de­ci­sions on ra­tio­nal cal­cu­la­tions, act with ra­tio­nal­ity when choos­ing, and aim to in­crease ei­ther plea­sure or profit.

Ra­tio­nal choice the­ory also stip­u­lates that all com­plex so­cial phe­nom­ena are driven by in­di­vid­ual hu­man ac­tions. There­fore, if an econ­o­mist wants to ex­plain so­cial change or the ac­tions of so­cial

in­sti­tu­tions, he needs to look at the ra­tio­nal de­ci­sions of the in­di­vid­u­als that make up the whole.

The ra­tio­nal choice the­ory as it is drawn from an eco­nomic per­spec­tive is found only very ap­pro­pri­ate in any eco­nomic ap­proach, and is very help­ful to any econ­o­mists or to those whose mind­set is in­creas­ing their fi­nan­cial gains, or to those who wants to pros­per in their busi­ness en­deav­ors.

To be self-suf­fi­cient is not easy even to those who only in­her­ited their cap­i­tal from their rich par­ents. To main­tain a busi­ness, ra­tio­nal choices should be made at all times. Econ­o­mists find the the­ory very valu­able be­cause it fu­els them in reach­ing their goals. It is hoped that the gov­ern­ment should also make use of this the­ory in pro­mot­ing so­cial re­forms for the coun­try.

There is not much fi­nan­cial gain in it but the wis­dom, com­fort, peace and or­der the ra­tio­nal choice can bring to Filipinos are ex­po­nen­tial when used.

While ra­tio­nal choice the­ory is clean and easy to un­der­stand, it is of­ten con­tra­dicted in the real world. For ex­am­ple, po­lit­i­cal fac­tions that were in fa­vor of the Brexit vote held on June 24, 2016, used pro­mo­tional cam­paigns that were based on emo­tion rather than ra­tio­nal anal­y­sis. These cam­paigns led to the semi-shock­ing and un­ex­pected re­sult of the vote, when the United King­dom of­fi­cially de­cided to leave the Euro­pean Union.

In­di­vid­u­als of­ten make ir­ra­tional de­ci­sions and ex­plores why they do so like science ex­per­i­ments. It can­not be ne­glected; de­ci­sion-mak­ers would have dif­fer­ent opin­ions. Ordinary peo­ple would also have their own. But we can al­ways learn from pre­vi­ous mis­take and avoid re­peat­ing them with com­ing up log­i­cal choices, or ra­tio­nal choices when pres­sured next time. We can­not al­ways rely on just our emo­tions. ( Paid article)

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