THEORIES PRIMER:

Rational Choice
&
Game Theoretical Analysis

International Relations
Friday, 26 January 2007
Rational Choice Theory
John Stuart Mill on “Man as a Being”
 Self-interest
 Individuals are goal seekers
 Self-interest is characterized by reason
 Reason is the cause for individual behavior
 Man is a utility-maximizing individual
 The X behind state formation is to help man
fully maximize the Z of society.
 Q: if everyone is utilitarian, what is the basis
of behavior? A: maximum interest of state.
Rational Choice Theory

 All states are actors in the arena

 Assumes that state behavior is dependent on

the utility it could derive with interaction from
other states.
Kinds / Components

 Path Dependence

 Evolutionary Development

 Game Theoretical Model

Path Dependence

 Refers to an understanding of society that…

dependent variable… how it will behave
today.

 Today depends of past (historical analysis)

actions taken by the institution, countries, in
the past, how it consequences today.
Evolutionary Development

 Common with the former

 Darwinian Concept of linear history

Game Theoretical Model
 Most famous of Rational Choice
 Product of mathematical development
(Economics), in bargaining.
 John Nash: how to be able to judge probable
outcomes
 Dates back to macro economics
 Father of Economics: Adam Smith (Wealth of
Nations – Laissez Faire  state not to
interfere)
Equilibrium
 Supply meets Demand
Elements of Rational Choice

 Rational Actors

 Assumption of utility maximizing

 Condition of Equilibrium

 Singularity of Rules a.k.a. Rules of the Game

 Ceteris Paribus
How to Test a True Theory

 Ability to portray and explain behavior and or

phenomena
Oligopoly
 Group of producers behaving like one to set
price.

 Market characteristic: Impertinent

Rules

 Laws

 Institutions
Bossism

 Framework of Sidel

 See Sidel
The State and Game Theory
Game Theory
 Pure Theory building exercise
 Methodology to building a theory
 Composes of four elements and arranging
them into a 2x2 matrix
 Explains the action of actors based on their
assumptions
 1 single rule
Freestyler Trivia
Munich Peace Conference (1937)

 2 years before WWII

 Hitler just annexed Austria, resulting the

transfer of Von Trapp to New York
Two ways to model a scenario

 A Priori

 A Posteriori
Assignment
 Brush up on your readings Ch 6 thru 7
 World History 16th century onwards
(beginning from the TREATY OF
WESTPHALIA the supposed “birth of the
state”)