Lecture 04 Class Notes

Two Models of Decision-Making: Rational and Relational

Allison and ideal type construction: if we are trying to capture nature of decision making, examine the two extremes and determine what is in between.

Rational Actor Model

• Create a decision tree using choices and possible outcomes (whether it will rain, whether to take an umbrella)
• Value system determines value of each outcome (burdened w/unnecessary umbrella, soaked)
• Also includes assessment of outcome probability (how likely it is to rain)

Relational Actor Model

• Decisions depend on what other people are doing: friends, family, community
• Embedded within institutions, cultural norms and expectations
• Includes assessment what impact decision has to other people and things

Example 1: Two decisions

• Do I default on this mortgage? (rational actor model)
  • Renting house while away at grad school
  • Renters left before lease was up; no rent money to pay for mortgage
  • Choices: send money to mortgage, or walk away from house
  • Build decision tree based on probability of outcomes
• Do I get married? (relational actor model)
  • Based on relationships with his family, her family, where do we live, how do we stay in school

Example 2: Oxford Oak - cut or don’t cut?

• Probably used rational actor model: assess probabilities and come out with payoffs
• If there was more time, might have used relational actor: “how would my classmates feel like?”, “how would I feel on a walk during finals and I heard the chainsaw buzzing?”

Two ends of a spectrum—complementary, not mutually exclusive

• We use both models but dominant framework matters (whether we approach things with rational actor perspective and bring in some of relational, or vice versa)
• e.g. what to eat: looking at caloric/budget/taste maximization, or preparing a meal that connects you with the source, your community, etc.
• Cadillac Desert: building dams to tame rivers or living adaptively
• Question is which is the best model for decision at hand; either one is right or wrong but may be useful in combination. Using only one means missing the advantages of the other. Strongest decision uses both.

	rational	relational
actor	unitary individual	member of group
unit of analysis/action	choice	relations
goal orientation	value maximization, control	integration, adaptation
time orientation	one-shot, static	ongoing, dynamic
how "environment" is defined	natural resources, nature "doing its thing"; inputs to a process	place, home; greater whole (homeland, biosphere)

Rational actor is predominant model used

• Social sciences, many natural sciences; also government, business, etc.
• Emerged in response to excesses of relational approach (feudalism, oppression, discrimination)
• Now seeing limitations of rational model in globalized world with wide-ranging interconnections