What are the key assumptions of rational choice individualism. Are they valid assumptions? Cite examples to support your examples.

The popularity of economics can be explained by the clear formal models of behaviour that can be constructed from the assumption that people are motivated by economic needs and the desire to profit. The idea that people tend to weigh up the costs and benefits of actions in a calculative way explains why social scientists have increasingly turned to the theory of rational choice.

There is a history of rationality in sociology. However rational action has only been traditionally seen as present alongside tradition, emotion and other value oriented action. Traditionally the great sociologists such as Durkheim, Weber and Marx have all found economic rationalism insufficient. Rational choice theory completely denies the existence of theses kinds of action. The central argument is that all social action can be approached from the prior assumption of rational motivation.

George Homans (1961) set out the basic framework of social exchange theory, rational choice theories application to social interaction.

A segment of a social network

English: Diagram showing the Social Exchange Theor...

Daniel Kahneman

Homan drew heavily upon the psychological principals of behaviourism to build theoretical models explaining exchange involving two or more actors. It was his belief that the principle of self interest could explain society. To Homans 'society' was a collection of individuals all trying to find ways of maximising their interests through exchange. Homans believed that the actions of people were influenced by reward and punishment, he termed this 'conditioning'. In social interaction joint behaviour develops through the exchange of rewarding and punishing behaviours. Homans thought that money and approval were the general means of exchange in economic and social exchange respectively.

The form of rational choice theory I intend to examine in this essay is termed individualism. This form posits the individual as unaffected by people and the environment and the ability to achieve ends by independent reasoning (Barnes 1995). This has a profound...