Reference Work Entry

Handbook of Risk Theory

pp 499-516

Paradoxes of Rational Choice Theory

  • Till Grüne-YanoffAffiliated withHelsinki Collegium of Advanced Studies, University of Helsinki Email author 

Abstract

Rational choice theory (RCT) is beset with paradoxes. Why, then, bother with a theory that raises numerous counterexamples, contradictions, and a seemingly endless stream of mutually conflicting remedies? In contrast to this impression, I argue in this chapter that RCT paradoxes play much more productive roles. Eight paradoxes are described in detail, some of their proposed solutions are sketched out, and they are classified according to the kind of paradox they pose. At their example I argue that RCT paradoxes, rather than providing evidence for straightforward rejections of the theory, play important roles in education and in normative research.