Rational Choice Theory Research Paper

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Rational choice theory refers to a set of ideas about the relationship between people’s preferences and the choices they make. There are several variants of rational choice theory and this essay refers to these collectively as the rational choice approach (RCA). The conceptual foundations of the RCA originate in Cesare Beccaria’s1764 essay On Crimes and Punishments and Jeremy Bentham’s 1789 work, An Introduction to the Principles of Morals and Legislation. One school of thought, the deterrence approach, builds on Beccaria’s insights that effective punishments need to be swift and certain (Paternoster 2010). Alternative uses of the RCA focus on Bentham’s formalization of the idea that the motivations for actions, criminal or otherwise, are universally grounded in individual self-interest and the desire to maximize pleasure and minimize pain. As a result, punishments require a level of rationality if they are to influence people’s perceptions of the pleasures and pains associated with particular choices.

Beccaria’s and Bentham’s approach to crime and punishment initially had some influence on punishment and social control practices but the ideas associated with the “classical school” were superseded by two centuries of biological, psychological, and sociological explanations. Their disciplinary differences notwithstanding, these explanations of crime emphasize the uniqueness and pathological nature of criminal behavior. They argue that crime occurs because biological, psychological or social conditions motivate people to break the law. Ideas from the classical school began to remerge in a revival associated with the economist Gary Becker’s (1968) expected-utility model of criminal decision-making, the work on “reasoning criminals” by criminologists Derek Cornish and Ronald Clarke (1986), and sociologist Jack Gibbs’ writings on social control (citations for works cited but not included in the references can be found in McCarthy (2002) and Paternoster (2010)). The RCA approach to crime builds on Beccaria’s and Bentham’s founding principles and the centrality of self-interest for understanding behavior. The RCA uses terms such as rational or preferences that have different popular and disciplinary meanings. The following outlines the key assumptions behind the approach and explains the meaning of key terms.

The Rational Choice Approach (RCA)

According to the RCA approach:

  1. People have preferences for outcomes (goods, services, states of being, etc.); preferences do not typically refer to actions or behaviors.
  2. People’s preferences are influenced by the expected benefits of an outcome, relative to its costs. There are several types of potential benefits (e.g., monetary, emotional, and social) and costs (e.g., opportunity, external, sunk as well as monetary, emotional, and social). The anticipated cost-benefit ratio associated with an action is an indicator of its expected utility.
  3. People can order their preferences for outcomes from most to least valued. Preferences are relatively stable: they do not change during a decision, but can be modified as a result of new information.
  4. People’s assessments of the benefits and costs of outcomes are influenced by the information they collect. Gathering information is however, itself a cost. Thus, although people prefer to have all available information when making decisions, choices are made frequently with incomplete information. People may believe they have adequate information when they do not, they have imperfect memories, and they often miscalculate. In other words, people have subjective expectations about the utility they will receive from their choices.
  5. Preferences are also influenced by people’s orientation to time. Individuals with a positive time preference will need greater future compensation in order to forgo a present benefit, whereas those willing to forgo a current benefit for a lower level return in the future have a negative time preference. Time preferences are not fixed across all decisions but are influenced by several factors, including a person’s current level of a valued outcome.
  6. Preferences are further affected by attitudes toward risk and uncertainty. People do not have a preference for risk taking in itself (i.e., risk taking is not an outcome); rather, people’s attitudes toward risk taking influence the utility they associated with an outcome. A risk-averse person generally refuses to accept what is calculated to be a fair gamble; those who generally have a preference for taking fair gambles, rather than a sure thing are risk-seekers; and between these extremes are people who are risk-neutral: those who are generally indifferent to accepting or refusing a fair gamble. Some rational choice theorists assume that risk disposition if relatively fixed, whereas others assume it will vary across types of decisions and situations.
  7. Rational actions are those that are consistent with the above assumptions. Common shorthand is to describe such actions as being consistent with the maximization of utility. Determining a behavior’s “rationality” depends on knowing, or making assumptions about a person’s information, preference ordering, and approach to risk-taking, and time discounting. People’s rational choices may, therefore, result in different behaviors, even when they are faced with the same situation.
  8. The RCA does not preclude people from acting irrationally and people may pursue a course of action inconsistent with their preferences for a variety of reasons. Their decisions may be negatively influenced by an intense emotion or a sudden change in context. They may have limited cognitive skills that reduce their ability to use effectively the information they gather or to reflect upon previous choices, or they may be unaware of the interests that motivate them (these may be equally obscure to observers). Explanations of behavior that emphasize false consciousness, habitus, national culture, inertia, determinism (biological, psychological, or social) or similar forces suggest that these may also prompt people to make choices that are inconsistent with their preferences.
  9. The RCA does not argue that people always think in ways typically associated with rationality as used in common discourse (e.g., reasoned, thoughtful, reflective), nor does it assume people undertake literal calculations. In its simplest form, the RCA refers to the consistency between people’s preferences and choices. It is also a probabilistic, rather than a deterministic approach: it explains how most people make many of their decisions, without assuming that all choices can be explained. It does not assume that people are always conscious of their attempts to maximize their interests but simply argues that many of their actions can be understood as rational. As is the case with other accounts, the RCA simplifies the complex causal origins of behavior; however, its value lies in its parsimonious, elegant explanation that has considerable predictive power.

The RCA And Crime

In contrast to biological, psychological and sociological explanations of crime, the RCA approach assumes that crime can be understood “as if” people choose to offend by using the same principles of cost-benefit analysis they use when selecting legal behaviors. Thus, the decision to offend is influenced by people’s preferences, their attitudes toward risk and time discounting, and their estimates of an illegal opportunity’s availability, costs and benefits, versus a legitimate opportunity’s availability, costs and potential for realizing the same or comparable returns. Or, as more commonly expressed by economists, people offend when the subjectively expected return to crime (i.e., the benefits-costs ratio) exceeds what they believe they will obtain by spending the same time and other resources to pursue legal activities (Mehlkop and Graeff 2010).

The RCA differs from many theories of crime in that it provides an account of how people’s preferences affect their choices, rather than explaining the source of their preferences. Thus, it is a sharp contrast to theories that argue that crime is a result of low self-control, differential association, weak social bonds, strain, labeling, disadvantaged neighborhoods, or other social experiences or forces. Indeed, many of these explanations assume that offending is irrational and suboptimal.

Theoretically, the RCA approach shares some, but not all of the features of other explanations of criminal decision-making, such as routine activity theory, the reasoned-offender approach, and the criminal-event perspective. Although the RCA contrasts with theories that explain the origins of choice, there is a considerable conceptual overlap between the RCA and more sociological theories of offending and suggestions for theoretical integration are common. However, it is incompatible with explanations that argue that structural conditions or socialization produce character defects that make an offender’s decision-making distinct from that of non-offenders. In sum, the RCA provides a fruitful approach to understanding criminal decision-making, and can be combined with explanations of the origins of preferences, and the availability of the mechanisms, or instruments, by which preferences are realized (see Dahlb€ack 2003 for a more detailed explication of the RCA to crime).

Incentives And Crime

Punishment Costs

Most of the early RCA research investigates the hypothesis that all else equal, increases in punishment should decrease offending. A large number of studies have explored the deterrent effect of capital punishment (most of the research discussed here uses US data). The general finding is that executions have little deterrent effect (Levitt and Miles 2006). There is however, evidence that the costs associated with incarceration act to deter offending. Early studies have a number of shortcomings, but recent research has used more sophisticated methods and higher quality data to investigate this relationship. In their review, Levitt and Miles (2006) note that a number of recent studies find that increases in incarceration rates are associated with subsequent declines in arrest rates; however, the size of the effect is modest (i.e., a 1–10 % reduction in arrest rates for a comparable increase in prison populations), and the escalation of the cost of imprisoning people may make incarceration a less prudent deterrent.

Recent investigations that use individual-level data also document a deterrent effect for several, but not all types of offending. Research on inmates finds large deterrent effects emanating from the certainty of punishment, and smaller, generally insignificant effects from the severity of sanctions (Grogger 1991). However, punishment effects are conditional. The certainty effect is greatest for serious felony crimes and for whites, and declines in strength for non-serious offenses, blacks and Hispanics. In contrast, the severity effect is positive for whites and negative for blacks. Related research reports that inmates who successfully offended – that is who were not arrested for their crimes – are more likely to think that they could avoid being arrested in the future if they re-offended (Horney and Marshall 1992).

A number of earlier studies reported little effect of policing on crime, whereas more contemporary research that uses sophisticated methods and richer data finds that increases in the number of police have nontrivial but modest negative effects on crime (e.g., a 3–5 % reduction for a 1 % increase in the number of police; see Levitt and Miles 2006). There may however, be a ceiling effect: at some point police may have arrested most of the offenders involved in serious violent or property crimes, they may then turn to arresting offenders who commit more trivial or victim-less crimes (e.g., drug use) in part because police use crime and arrest rates to justify their employment and the need to hire more officers. Similar to imprisonment, increases in policing may not be the most efficient way to deter crime.

Related studies focus on individual differences in perceptions about the likelihood of punishment and the consequence of this variation for crime. Many of these investigations use vignettes or hypothetical situations to measure people’s willingness or intention to offend in the future. For example, a recent study of adults finds that individuals who believe that the probability of detection is low are significantly more willing to commit a tax fraud in the future (Mehlkop and Graeff 2010). Research on adolescents also finds that youth who believe that arrest is both likely and costly are less likely to have committed a theft or violent crime (Matsueda et al. 2006).

Economic Costs

The RCA approach suggests that economic costs, such as a loss of legitimate income, also influence offending. Consistent with this hypothesis, research on inmates reports a strong, negative effect of legal income on crime and a positive relationship between crime and the length of a current jobless spell (Grogger 1991; also see Uggen and Thompson 2003). As well, relatively minor criminal activity complements employment, whereas employment and serious crime are substitute activities. Thus, research that pools data on minor and more serious crime may erroneously conclude that employment does not affect criminal activity.

Other investigations also demonstrate a connection between a decrease in wages and offending. For example, research suggests that that declining wages in the USA in the 1970–1980s may have contributed considerably to youth crime increases in these years, with a 20 % fall in wages leading to a comparable increase in offending (Grogger 1991). Moreover, rising wages explain a considerable amount of the decline in offending that occurs with age.

Comparable analyses find that economic incentives and opportunity costs exert a powerful influence on offending. For example, the odds that an offender will stop offending increase with legal earnings and they decrease with illegal ones (Pezzin 1995). Furthermore, although the number of past convictions encourages desistance, the magnitude of this effect is considerably smaller than that of legal wages.

Other Costs

Sociologists have contributed further to the economic approach to crime’s costs by proposing a more inclusive approach to crime’s liabilities. These costs include the stigma and rejection by significant others that can accompany state sanctions; commitment to normative values; beliefs that the legal system is just and moral; and the guilt and shame that sanctions and norm violations may induce. Research that uses vignettes finds that many of these factors are better predictors of a willingness to offend in the future than is the possibility of arrest (see Nagin 1998). Moreover, studies that allow individuals to list the potential costs of crime find an even broader array of concerns. For example, when asked about the potential costs of shoplifting a sizable proportion of subjects reported including “bad karma,” being banished from a store and the potential that it would be a gateway act that would lead to more serious crime (Bouffard et al. 2010).

Perceptions about social and state sanctions probably have the greatest influence on particular people: individuals who have a considerable stake in society, have internalized norms that prohibit offenses, are embedded in networks of people who appear to follow the law most of the time and whose criminal experiences are limited to a small number of common petty offenses. In other words, these perceptions may have their greatest effects on those who have few of the motivations or opportunities that encourage crime. Consistent with this claim, research finds that strong connections to normative society discourage crime. For example, in the study of tax fraud cited earlier, general support for the legal code is negatively associated with a willingness to offend (Mehlkop and Graeff 2010).

Research on homeless youth explores the deterrent effect of a different type of criminal cost: physical harm (McCarthy and Hagan 2005). Many people use violence in responding to illegal activities (e.g., victims, bystanders, police, and other offenders) and perceptions about the dangerousness of crime are negatively related to theft, drug selling and prostitution, independent of other costs, benefits and background variables. Research that asks people to describe the potential costs of crime also finds that danger is an important concern for many individuals (Bouffard et al. 2010).

The Benefits Of Crime

Crime may provide a number of benefits that range from monetary returns, the excitement or thrill of the crime, to respect or status. However, critics of the RCA approach to crime typically argue that the returns to crime are so meager that they cannot be realistically viewed as incentives. Although many offenders do not profit much from their crimes, the illegal incomes of others exceed those provided by legal employment. For example, research on Washington DC drugsellers finds that they earned monthly incomes that were more than double the median amount earned in legal jobs (Reuter et al. 1990). Other studies find Chicago crack dealers earned an average wage of $11 an hour, a substantially higher wage than the available unskilled labor jobs; moreover, although low end “foot soldiers” often made below minimum wage, several gang leaders earned between four and eleven thousand dollars a month (Levitt and Venkatesh 2000). A related study on homeless youth reports that, on average, youth who sold drugs earned three times the average legal daily wage earned from legitimate employment (McCarthy and Hagan 2001). This investigation also documents that many offenders have reasonable expectations about crime’s financial returns: offending is positively associated with the anticipation that crime will bring greater returns than legitimate employment, but is unrelated to the belief that crime will provide “lots of money.” As well, the belief that crime will provide a financial return is related to a willingness to offend in the future (Mehlkop and Graeff 2010).

Both human and social capital contribute to success in normative activities such as employment, and criminal parallels to conventional capital may influence illegal success. For example, McCarthy and Hagan (2001) find that previous experiences contribute to illegal earnings, as does specialization, a willingness to work cooperatively with others, and the number of connections with other offenders and the support these associations provide.

Other research finds that the belief that crime will provide a psychic thrill or excitement, coolness or respect, or simply good feelings are related to offending or the willingness to offend in the future. For example, Matsueda et al. (2006) find that youth who reported that offending was exciting, would enhance their “coolness,” and that both of these were likely to happen to them, reported greater involvement in theft. McCarthy and Hagan (2005) also report a positive association between offending and the perception that crime is exciting in their research on theft and drug selling among homeless youth. They also find however, that the perception does not contribute to all types of crime: the view that prostitution is exciting is unrelated to selling sex. Nonetheless, a recent meta-analysis of the results from 13 investigations that examine the returns to crime finds that the majority of studies report positive significant associations between offending and offenders’ perceptions that crime will provide valued returns (Baker and Piquero 2010).

Game Theory

The focus of RCA theory on individual preferences downplays the extent to which decisions are influenced by the choices made by others. Yet, the decision to offend may be strongly affected by the decisions made by the police, by victims, bystanders or other people involved in crime. Game theory highlights this interactional dynamics of decisions and it offers an important tool for constructing models that make explicit assumptions about people’s preferences, behavioral options and consequences, and the connections between their choices and their expectations of other’s decisions. Although game theory has most often been used to build formal mathematical models of offending, rather than guide empirical research, the propositions of game theory models (GTM) are falsifiable and therefore, subject to empirical test. The following four examples illustrate GTM contributions.

Cressman et al. (1998) use game theory to explore the dynamics between property crime victims, thieves and the police. In their model owners have two choices: they may be passive, doing nothing to guard property, or they may engage in various protective activities such as surveillance. Police also have two choices: actively pursuing offenders or passively waiting until victims contact them. Criminal opportunists choose between theft and non-theft. Owners’ increased vigilance will deter theft; however, as crime decreases, the owners’ incentive for choosing passivity increases, encouraging their inactivity and increasing the returns to offenders who respond to the inactivity by increasing their involvement in crime. When police actively pursue offenders they increase the likelihood that thieves will be caught, but over time, state policing makes passivity a dominant strategy for owners and theft again becomes dominant for criminal opportunists and offending increases.

Tsebelis (1990b) adds further insight into the relationships between police activity, sanctions and crime. This game begins with the following assumptions: offenders prefer to offend when the police are elsewhere and prefer to follow the law when they are present; the police prefer to enforce the law when it is violated and to not enforce it when it is not. In other words, both players’ optimal choice depends on the decision of the other, and both have an incentive to change their behavior in response to the other’s actions. These assumptions lead to a situation in which an increase in the severity of sanctions initially decreases crime by diminishing its expected utility. The police have less of an incentive to enforce the law as crime drops, and people respond to their disinterest by increasing their offending. This series of moves and countermoves eventually encourages a new equilibrium in which the increase in penalties has no long-term effect on criminal activity. In short, increasing the severity of penalties has the greatest effect on police behavior, lowering their monitoring and thus decreasing the certainty of arrest. These games reveal some of the processes involved in crime at the aggregate level, and may help explain why stiffer penalties and greater police enforcement may deter crime in the short run, but not over a longer period (a finding often noted in deterrence research).

Bueno de Mesquita and Cohen (1995) expand the list of decision makers in their game, adding the government. The game assumes that people’s abilities to meet their preferences are influenced by the following: their level of social status, the value obtained through legitimate opportunities a government provides, the value provided by social assistance programs, the fairness of the government, the probability of apprehension and punishment for offending, and the cost of crime. People can choose to offend or to engage in socially acceptable behavior. Government can treat citizens in two ways: a fair government allows people legitimate opportunities to earn benefits that exceed the value provided by the government’s social safety net; an unfair one imposes policies that shift resources from the individual to the government and limit returns.

Solving the game reveals several conclusions. First, an individual’s decision to offend is strongly influenced by his level of trust in the government’s expected fairness: if people are convinced that their government will treat them unfairly, punishment may have no effect on offending. Second, with level of trust held constant, the fundamental structural features of a society increase the motivation to offend for the poor, relative to those who are wealthy. Indeed, no level of trust is sufficient to reduce crime if poverty is extreme. Reducing crime among the poor requires increases in opportunities to gain social status and the rewards provided by legitimate opportunities. Third, increasing the severity of punishment will have a small impact on the decision to offend, whereas increases in the probability of apprehension have a far greater effect in deterring crime. Fourth, improving social welfare does not discourage offending, and may actually increase it if offenders receive benefits independent of their choice between legal and illegal actions.

An extension of GTM, evolutionary game theory (EGT) relaxes the assumption that people may know the benefits of behaviors when they choose them and allows for unintended rewards that can encourage people to repeat their behaviors and can encourage others to copy them. One of the most ambitious uses of EGT to study crime is Vila and Cohen’s (1993) test of hypotheses derived from Cohen and Machalek’s ecological theory of expropriation. Expropriation occurs when individuals (or groups) use coercion, deception or stealth to usurp material or symbolic resources from others; in short, when they steal. Cohen and Machalek argue that stealing develops as a strategy because the social organization of production (e.g., the routine patterns of activity, the availability and distribution of resources and mode of production) creates an opportunity structure that invites invasion by non-productive strategies. People adopt or copy others’ stealing when they see that it is successful.

In Vila and Cohen’s game, people have only two behavioral strategies: produce or exploit. They also know the costs associated with exploitation. Vila and Cohen use computer simulations to estimate models of repeated game playing over 500 generations. The simulations demonstrate that the likelihood of stealing increases when its costs are low and returns are high, and when there is little competition among thieves. It is also more likely when changes in production encourage continual innovation in illegal strategies and when these can be easily transmitted. Consistent with Cohen and Machalek’s claim, Vila and Cohen’s analysis suggests that expropriative crime is a normal outgrowth of routine economic, social and productive interactions.

Multilevel RCA And Crime

While many studies using a RCA to crime emphasize individual-level preferences and behaviors, recent scholarship focusing on collective processes within neighborhoods offers a multilevel model of crime. Although theories linking individual reciprocity and social structures/collectivities date back to the foundational sociological writings of Emile Durkheim and the Chicago School, contemporary studies reflect a revival in multilevel scholarship, examining the interaction between individuals and aggregate collectivities. The multilevel approach to rational choice offers new ways to analyze the connections between individual preferences and community or neighborhood characteristics. It also provides insights into how individuals and communities encourage or discourage crime. For example, Matsueda (2013) combines a RCA with ideas about neighborhood social capital and collective efficacy to understand the connection between individual utility, macro-level neighborhood phenomena, and crime. Research suggests that social capital – the potential for relationships with others to generate trust and other resources – and collective efficacy – the willingness of residents to actively engage in social control of their neighborhood – both reduce opportunities for crime.

While collective efficacy is often associated with neighborhood structure, Matsueda (2013) contends that it originates in people’s attempts to maximize their individual utility. Individuals seek to maximize utility by asking for favors and by doing favors for neighbors such as exchanging information about local politics, problems with children, property or personal victimization or other neighborhood news. This reciprocal exchange fosters obligations and mutual trust; as social capital builds, neighbors’ motivations to work collectively to address local problems increases. The interaction between individual-level rational behaviors of exchange, collective efficacy and neighborhood structure represent a multi-level framework for understanding how micro-level behaviors can have macro-level outcomes.


The RCA to crime provides a parsimonious explanation of the process by which individuals choose to offend. It assumes that people actively choose to commit crimes and that this choice is influenced by the same factors that affect the decision to behave in ways that are consistent with legal codes. Thus, both law violating and law abiding behaviors reflect the desire to maximize utility. These choices are however, influenced by attitudes toward risk and time discounting, and estimates of an illegal opportunity’s availability, costs and benefits.

Our summary of the RCA suggests that many common criticisms of it are unfounded. According to some critics, the RCA adds little to existing explanations of crime; yet, the RCA grants people more agency than explanations of offending that adopt a deterministic view to explain the effects of socialization, peer associations, and other social conditions and experiences. Other detractors claim that the predictions of the RCA are inconsistent with the reality of crime. Critics charge that the RCA describes offenders who collect all relevant information, and weigh it carefully, systematically and effectively before acting. As is clear from the above summary, the RCA to offending does not make these claims.

Other critics charge that the RCA is only applicable to specific types of illegal behavior, premeditated theft for example, but not crimes of passion. RCA recognizes that an individual’s choice to commit a crime may not be rational; however, there are no reasons for assuming that particular types of crime are beyond choice, or that the RCA does not apply to the decision to commit these offenses.

By far, the most important concerns with the RCA are its assumption about preferences and decision-making. As well, findings from the experimental psychology research appear inconsistent with predictions derived from the RCA. Defenders of the conventional RCA note that although a substantial proportion of experimental subjects select options that contradict the RCA, many people’s choices are consistent with it. Advocates of RCA argue that combining conventional RCA with a theory of errors can correct many of the observed inconsistencies in predictions derived from the RCA, making it superior to alternatives (e.g., prospect theory and bounded rationality).

Research on the RCA to crime suggests a number of conclusions. First, people who choose to offend, as well as those who do not, have a variety of preferences. It makes no sense to assume that all offenders share the same preferences, or that one preference (e.g., the thrill of crime or its material returns) dominates in offending decisions. Preferences vary, crime provides an array of returns, and people differ in their assessments of crime’s costs and benefits. Second, the decision to offend may be strategically chosen given the decisions made by others; its utility may change – from being a dominant to a nondominant strategy – depending on the strategic choices of others. Although people often assume that offenders and the police (as well as victims and other agents of social control) have unique preferences that are oppositional, independent and stable, game theory and deterrence research suggest that each group’s preferences can overlap, and may change in response to the actions of the other, as does their choice of strategies.


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