Abstract
One of the controversial issues of rational choice theory is whether individual actors maximize their utility. Answering this question first requires to make clear what is meant by “utility maximization” (UM). There are different definitions in the literature. In this essay, “utility” refers to anything that realizes or thwarts individual goals. “Maximization” means that actors do what they think is best for them in the given situation, i.e. what realizes their goals in the subjectively best way. It is argued that this definition is theoretically fruitful as a concept in a wide version of rational choice theory that seems superior to other versions. After a brief outline of this theory several possible problems of the UM hypothesis are discussed. (1) It is shown that the UM hypothesis is falsifiable. (2) It is illustrated with examples that existing social psychological theories, the work of classical social scientists and theories of the middle range implicitly assume UM. (3) It is argued that a “reason-based” approach is not a convincing alternative to UM. (4) Several possible falsifications of the UM hypothesis are rejected. The conclusion of this essay is that the UM hypothesis is widely applied implicitly and confirmed in empirical research. It is further argued that there is so far no clearly superior alternative decision algorithm.
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Notes
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This example is based on the economic standard theory of consumer behavior. For details see any economics textbook such as Phelps (1985).
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Opp, KD. (2020). Are Individuals Utility Maximizers? Empirical Evidence and Possible Alternative Decision Algorithms. In: Mays, A., et al. Grundlagen - Methoden - Anwendungen in den Sozialwissenschaften. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-15629-9_23
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