Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand. Rationality can be used as an assumption for the behaviour of individuals in a wide range of contexts outside of economics. It is also used in political science, sociology, and philosophy.

Rational choice theory can apply to a variety of areas, including economics, psychology and philosophy. This theory states that individuals use their self-interests to make choices that will provide them with the greatest benefit. People weigh their options and make the choice they think will serve them best.

The anomie theory was first written in the 1940s by Robert Merton. Merton’s theory explains that juvenile delinquency occurs because the juveniles do not have the means to make themselves happy.

Rational choice theory is often criticized, sometimes with good arguments, and sometimes with bad. Although some of the bad arguments may apply to bad versions of the theory, critics ought to address the best versions. The most common misunderstanding is that the theory assumes agents to have selfish motivations.

The opposite of rational choice theory can be called irrational choice theory, in which people act randomly.

Rational choice theory implies that criminals are rational in their decision-making, and despite the consequences, that the benefits of committing the crime outweigh the punishment. Rational choice theory has its fair share of non-supports, simply because the theory suggest criminals act rational in their thinking.

The rational model allows for an objective approach that’s based on scientifically obtained data to reach informed decisions. This reduces the chances of errors, distortions and assumptions, as well as a manager’s emotions, that might have resulted in poor judgments in the past.

What are the limits on Rational Decision Making?

• Decision makers do not have complete knowledge of all the facts surrounding the problems.
• The search for decision is stopped as soon as the minimum acceptable level of rationality is reached.
• A decision making situation may involve multiple goals all of which cannot be maximized simultaneously.

The rational decision-making process involves careful, methodical steps….The Rational Decision-Making Process

1. Step 1: Identify the Problem.
2. Step 2: Establish Decision Criteria.
3. Step 3: Weigh Decision Criteria.
4. Step 4: Generate Alternatives.
5. Step 5: Evaluate Alternatives.
6. Step 6: Select the Best Alternative.

15 Ways to Improve Your Decision Making

• Use both sides of your brain.
• Simplify the battlefield.
• Rest or sleep on it.
• Practice being decisive.
• Put your ego on the backburner.
• Practice mindfulness.
• Ask others for advice.
• Outsmart the anchoring bias.

Stop Being Indecisive

1. Pay Attention to Your Emotions.
2. Take Your Time.
3. Think Strategically.
4. Ask Who You’re Trying to Please.
5. Banish Your Perfection Mindset.
6. Let Go of Bad Decisions.
7. Visualize Possible Outcomes.