Rational Choice Theory Notes

These flashcards are designed to help review key concepts from Rational Choice Theory, including networks, trust, norms, capital types, and the free rider problem.

Rational Choice Theory (RCT)

A theory that views actors as rational, purposive agents motivated by maximizing rewards or realizing interests, emphasizing the context of group dynamics.

Trust

A bet-like calculation involving the balance of potential loss and gain when placing trust in others.

Social capital

An intangible resource rooted in the structure of relations between actors that facilitates certain actions and helps achieve individual and collective goals.

Open networks

Social structures where individuals are connected to only a few members of the group.

Closed networks

Social structures where most individuals know one another either directly or indirectly.

Norms

Socially defined informal rights to control the actions of others, which develop from repeated exchanges.

Conjoint norm

A norm where targets and beneficiaries are the same individuals, resulting in shared control and benefits.

Disjoint norm

A norm rooted in a conflict of interest, where different individuals serve as beneficiaries and targets.

Prescriptive norms

Norms that encourage proper behavior and result in positive outcomes.

Proscriptive norms

Norms that discourage improper behavior and aim to prevent negative consequences.

Heroic sanctions

Sanctions provided by a single beneficiary, typically more costly.

Incremental sanctions

Sanctions supplied by multiple beneficiaries, spreading the costs across several individuals.

Free rider problem

The rational decision to not participate in group activity when individual benefit is not reduced by non-participation.

Types of capital

Resources including human capital (skills), physical capital (equipment), and financial capital (money).

Human capital

Skills and capabilities developed in individuals allowing them to act in new ways.

Physical capital

Tangible tools, machines, and equipment that facilitate production.

Public goods

Resources or services that benefit all individuals in a group, which raises questions about individual contributions to their provision.