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Rational Choice
This book offers a rigorous, concise, and nontechnical introduction to some of thefundamental insights of rational choice theory. It draws on formal theories of microeconomics,decision making, games, and social choice, and on ideas developed in philosophy, psychology, andsociology. Itzhak Gilboa argues that economic theory has provided a set of powerful models and broadinsights that have changed the way we think about everyday life. He focuses on basic insights of therational choice paradigm--the general conceptualization rather than a particular theory--thatsurvive recent (and well-justified) critiques of economic theory's various failures. Gilboa explainsthe main concepts in language accessible to the nonspecialist, offering a nonmathematical guide tosome of the main ideas developed in economic theory in the second half of the twentieth century.Chapters cover feasibility and desirability, utility maximization, constrained optimization,expected utility, probability and statistics, aggregation of preferences, games and equilibria, freemarkets, and rationality and emotions. Online appendixes offer additional material, including asurvey of relevant mathematical concepts.
- GenresEconomicsPhilosophy
158 pages, Hardcover
First published April 30, 2010
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About the author
Itzhak Gilboa
27 books12 followersItzhak Gilboa works in decision theory and other fields in economic theory such as game theory and social choice. His main interest is in decision under uncertainty, focusing on the definition of probability, notions of rationality, non-Bayesian decision models, and related issues.
He is Professor at Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris, as well as Fellow of the Cowles Foundation for Research in Economics, Yale University (part time).
He is Professor at Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris, as well as Fellow of the Cowles Foundation for Research in Economics, Yale University (part time).
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Displaying 1 - 3 of 3 reviews
March 23, 2025
More than anything else, this is a book about rationality, how to understand the way our sense of the rational maps to sound decision making and how it may map to unsound decision making.
For Gilboa, rationality is not an objective state of flawless thinking. Instead, he understands “rational” to describe a process of thinking that a person is “comfortable with” and “not embarrassed by” (5), which makes it much more subjective than I am entirely comfortable with. He does acknowledge that rational thinking is that which is stable and coherent but with a person’s own sense of standards (6) instead of some standard or expectation outside the self. To me, this definition seems to describe a way of thinking that is “reasoned,” in that it is the result of a process of deliberate thinking, but that may still be flawed because the reasons are just not good. To call thinking “rational” seems to require the application of a set of principles of necessity or intellectual obligation to some standard that is outside the subjective. There are plenty of situations where the correct decision is counter-intuitive and uncomfortable but ultimately discoverable through systematic thinking.
In spite of this difference, I do think that Gilboa offers a look at the principles guiding rational thought and decision making. His point, if I read him correctly, is to show how our intuitions can map onto those frameworks. And at some level this makes sense — we do try to maximize utility, minimize risk, and try to win games or choose outcomes of equilibrium when outright winning is not possible. And we come to these conclusions by assigning value, utility, or some other kind of preference to desirable outcomes and we assess the potential for the various risks that threaten those positive outcomes. In that sense, rational decision making does appear intuitive and subjectively felt. The math that explains those intuitions and subjective preferences coalesce into models that appear to offer normative rules of logic but perhaps those rules are just the result of retrospective thinking about enough decisions where we know the outcome and where the law of large numbers leads us to see how the sum of those decisions converges on the mean, describable with a tidy mathematical formula.
The value in this book is that Gilboa builds up a vocabulary of decision theory and descriptive statistics that allow readers to develop a literate awareness of the factors that may be driving their sense of rational choice. In this way, the book is like Susan Stebbing’s Thinking to Some Purpose, which similarly tried to build a person’s meta-awareness of their own thought process and how they could be led toward or away from sound conclusions.
For Gilboa, rationality is not an objective state of flawless thinking. Instead, he understands “rational” to describe a process of thinking that a person is “comfortable with” and “not embarrassed by” (5), which makes it much more subjective than I am entirely comfortable with. He does acknowledge that rational thinking is that which is stable and coherent but with a person’s own sense of standards (6) instead of some standard or expectation outside the self. To me, this definition seems to describe a way of thinking that is “reasoned,” in that it is the result of a process of deliberate thinking, but that may still be flawed because the reasons are just not good. To call thinking “rational” seems to require the application of a set of principles of necessity or intellectual obligation to some standard that is outside the subjective. There are plenty of situations where the correct decision is counter-intuitive and uncomfortable but ultimately discoverable through systematic thinking.
In spite of this difference, I do think that Gilboa offers a look at the principles guiding rational thought and decision making. His point, if I read him correctly, is to show how our intuitions can map onto those frameworks. And at some level this makes sense — we do try to maximize utility, minimize risk, and try to win games or choose outcomes of equilibrium when outright winning is not possible. And we come to these conclusions by assigning value, utility, or some other kind of preference to desirable outcomes and we assess the potential for the various risks that threaten those positive outcomes. In that sense, rational decision making does appear intuitive and subjectively felt. The math that explains those intuitions and subjective preferences coalesce into models that appear to offer normative rules of logic but perhaps those rules are just the result of retrospective thinking about enough decisions where we know the outcome and where the law of large numbers leads us to see how the sum of those decisions converges on the mean, describable with a tidy mathematical formula.
The value in this book is that Gilboa builds up a vocabulary of decision theory and descriptive statistics that allow readers to develop a literate awareness of the factors that may be driving their sense of rational choice. In this way, the book is like Susan Stebbing’s Thinking to Some Purpose, which similarly tried to build a person’s meta-awareness of their own thought process and how they could be led toward or away from sound conclusions.
September 2, 2019
Anyone who buys an academic text on decision theory already knows intro topics (eg: money vs utility, Prisoner's Dilemma), so who's the intended readership? I read it hoping to gather examples for my game theory course, but it's data-free.
August 16, 2012
Preliminary reading list
Displaying 1 - 3 of 3 reviews