ABSTRACT
This chapter provides the basic structure of rational choice models and it surveys some influential applications of these models in public choice theory, the analysis of government taxation and spending policies, and the attempt to develop a game theoretical Marxism. It begins with Downs's claim that the treatment of agents as rational utility maximizers is relevant to all areas of social life, not merely to economic activity. Elster suggests, tendencies at the level of the economy as a whole can be explained as the unintended consequences of an aggregate of individually rational decisions. 'This mechanism generates social change not only in capitalism, but in any society in which economic decisions suffer from lack of co-ordination'. Przeworski insists on an uncompromising methodological individualism in his examination of the development of West European socialist movements. The chapter argues that the role of ideas in political life has more damaging consequences for rational choice analysis than such modifications are able to admit.
