Now we’re talking about choice—why do people choose to do things? Why do they take bribes?
If we suppose an individual faced with a set of actions to choose from, and all of the actions are linked to clear outcomes, there are two principles of rational choice.
Principle One: The individual has a consistent set of preferences for outcomes. There are two types of preference ordering: strict and weak. Strict ordering is like a total dominance hierarchy. No matter what, between two outcomes the individual will always have a preference. Weak ordering is like a partial dominance hierarchy, and an individual can have outcomes that are tied in preference. Unlike a partial dominance hierarchy however, the ordering will never be ambiguous—choices will always be tied or ranked, never unknown (as they were in the black male/white female scenario.)
Principle Two: The individual chooses an action to achieve the most preferred outcomes. Sometimes the choice is easy. Sometimes the link between action and outcome isn’t clear. Sometimes the outcome depends on chance, or someone else’s choice.
Well this seems pretty obvious, so what use is it? It’s useful because by understanding what a person’s preferences are, it’s possible to predict more complex decisions involving the interaction of multiple preferences.Read More »