Rational Choice and Categorical Reason

42 Pages Posted: 22 Jul 2002

See all articles by Bruce Chapman

Bruce Chapman

Faculty of Law, University of Toronto

Abstract

Recently, the positive theory of rational choice has come under attack from experimental psychologists and economists. Their experimental results, gathered together under the banner of behavioral analysis, show that the maximizing model of rational choice often does not provide a very accurate account of how agents actually choose. Moreover, the departures from the model appear systematic rather than random, suggesting that something other than maximization is going on. However, the general tenor of these studies is not to question the normative ideal of maximization. Rather, the departures from the standard account of rational choice are typically characterized, and criticized, as failures to be rational. Agents are only human beings, after all, and human beings are subject to the limitations that must, inevitably and systematically, arise out of personal bias, limits on the salience and availability of important information, and the distorting effects of how a given problem is framed. Thus, real world agents are only, it is said, capable of a bounded rationality, using rules of thumb and various heuristics (sometimes helpful, sometimes not) rather than the fully fledged maximizing rationality that is still largely accepted as the ideal for rational choice.

This paper argues that, for many decision-making problems, the normative account of rationality that animates rational choice theory, and not just the positive account that is criticized by the behaviorists, is deficient, even as a theory of ideally rational behavior, and that an alternative account of rational choice is required. Rationality, it is suggested, provides for an ordered particularity, including particular decisions, but the notion of an ordering that informs this alternative account of ideally rational behavior, and which is more appropriate in some decision-making contexts, including many legal ones, is very different from the idea of an ordering that informs the standard account within rational choice theory. The latter, which is closely allied to the idea of maximization, remains largely quantitative and single-minded in its orientation, this despite the pluralism of motivations that it appears to be willing and able to accommodate within its seemingly minimalist structure. The alternative account is more qualitative, or categorical (although not absolute), offering a conception of a rational ordering of particularity that is more allied to the idea of an understanding or interpretation (under rules or principles) than it is to maximization. In this paper this alternative conception of rationality is referred to as categorical reason.

The real challenge for the paper, however, is not so much to articulate two alternative accounts of rationality, but to begin to make each accessible to the other within some common intellectual framework. While rational choice theory provides a useful and precise set of tools for beginning this process of achieving mutual understanding, the paper argues that some quite fundamental postulates of rational choice theory (including the most basic choice consistency axiom and the strong independence assumption) will have to be relaxed if the contributions of categorical reason are properly to be accommodated within it. However, the paper shows that there is much advantage in this, even for what the rational choice theorist hopes to achieve, and illustrates the point by reference to some systematic difficulties that the rational choice theorist faces in the theory of social choice and game theory.

JEL Classification: A12, A13, C70, C90, D71, D81, K40

Suggested Citation

Chapman, Bruce, Rational Choice and Categorical Reason. University of Pennsylvania Law Review, Vol. 151, pp. 1169-1210, 2003. Available at SSRN: https://ssrn.com/abstract=315799 or http://dx.doi.org/10.2139/ssrn.315799

Bruce Chapman (Contact Author)

Faculty of Law, University of Toronto ( email )

78 and 84 Queen's Park
Toronto, Ontario M5S 2C5
Canada
416-978-6911 (Phone)
416 978 2648 (Fax)

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