Week 2: Rational Choice Flashcards
Equilibrium
A stable outcome.
Economists and rational choice theorists conceive of equilibrium
as arising when individuals interact in such a way that no individual has any reason to change their actions.
Critiques against rational choice theory
People are not rational, at most boundedly rational.
People do not always act in instrumentally rational ways.
People are not exclusively self-interested.
Rational choice ignores the institutional, cultural and social constraints which lead people to behave in predictable and not necessarily instrumentally rational ways.
Rational choice denies the existence of both of freedom of will and individual creativity.
It is the ‘ideas that actors hold about the context in which they find themselves rather than the context itself which informs the way in which actors behave’
Rational choice devotes too much time to model- building and not enough time to looking at what people actually want and how they actually reason.
Through its promotion of self-interested behaviour, rational choice promotes private ownership, competition and incentives. In doing so rational choice has become a self-fulfilling prophecy.
The median voter theorem
Competition forces parties to move to the position of the median voter.
The median voter theorem assumptions
There are only two parties
Political space is one-dimensional
Parties can move to and occupy any point in this one dimensional space
Parties are vote-maximizers
Voters vote for the party closest to them in the political space.
There is perfect information
Voters’ preferences are fixed
Empirical claims about coalition governments
The use of proportional voting systems does indeed seem to be associated with an increase in both the effective number of parties and the incidence of coalition governments.
Coalition governments are somewhat less durable than single party governments.
Coalition governments do not give extremist parties much room to participate.
Coalition governments give a great deal of influence to smaller centrist parties.
Minimal winning coalition theory
Given the assumptions only minimal winning coalitions will be formed.
This is because the parties know how many seats are needed for a majority and as they are all office seeking they don’t want extra parties who without them still make a majority as that would mean less cabinet posts for them.
Minimal winning coalition theory assumptions
A winning coalition is one whose membership constitutes one-half plus one of the legislature.
Politicians are purely office-seeking and derive utility from occupying cabinet posts.
Coalitions control their membership.
Each instance of government formation is a purely isolated event.
Their is perfect information.
Game theory
Game theory examines the way in which actors make choices when the outcomes following from that choice depend not only upon their own choice but the choice made by others.
Game theory assumptions
There are two or more players.
They are able to adopt various strategies.
They can earn payoffs.
Prisoners dilemma
A paradox in game theory where two individuals acting in their own self-interest do not produce the optimal outcome.
Thin rational choice theory
Thin conceptions of rational choice theory are conceptions in which the theory is relatively undemanding and in which it is relatively easy for the behaviour of actors to be consistent with the theory.
Thick rational choice theory
Thick conceptions of rational choice theory are conceptions with more robust behavioral predictions that are more easily falsifiable by empirical evidence.
The four versions of rational choice theory
- The definitional version
- The expected utility version
- Self-interest version
- Wealth maximizing version
The definitional version
Rationality is understood as suiting means to an end, but no normative theory of either means or ends is assumed.
The expected utility version
It is thicker than the definitional version because it does specify the means by which actors will seek to satisfy their goals and preferences. You choose the act with the highest utility.
The self-interest version
The course of action that gives the most profit to the decision maker, will be made able to predict his course of action. It is thicker than the previous versions because it predicts the manner in which actors will attempt to achieve their utility and predictions about the actors goals and preferences.
Solution for prisoners dilemma
Coercion, future cooperation and changing the pay offs
Solutions for the chicken game
Signal intentions convincingly before the game begins and pre-commitment
The chicken game
There is no dominant strategy
