Rational choice theory is an approach that assumes individuals make decisions by weighing the costs and benefits of different choices, and they choose the option that maximizes their personal gain or utility.
Related terms
Cost-Benefit Analysis: A process where individuals weigh the advantages and disadvantages before making a decision.
Utility Maximization: The idea that people aim to make choices that maximize their personal satisfaction or gain.
Opportunity Cost: The value of the next best alternative foregone when making a decision.