Rational choices: an ecological approach

Abhinash Borah*, Christopher Kops

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision-maker (DM) are way beyond the capabilities of typical human intelligence. Our key finding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristic-based ecological reasoning that draws on information about others' choices in the DM's environment. Formally, we propose a choice procedure under which, in any choice problem, the DM, first, uses this information to shortlist a set of alternatives. The DM does this shortlisting by a mental process of categorization, whereby she draws similarities with certain societal membersthe ingroupand distinctions from othersthe outgroupand considers those alternatives that are similar (dissimilar) to ingroup (outgroup) members' choices. Then, she chooses from this shortlisted set by applying her preferences, which may be incomplete owing to limitations of knowledge. We show that, if a certain homophily condition connecting the DM's preferences with her ingroup-outgroup categorization holds, then the procedure never leads the DM to making bad choices. If, in addition, a certain shortlisting consistency condition holds vis-a-vis non-comparable alternatives under the DM's preferences, then the procedure results in rational choices.
Original languageEnglish
Pages (from-to)401-420
Number of pages20
JournalTheory and Decision
Publication statusPublished - 2019
Externally publishedYes


  • Rational choice
  • Ecological rationality
  • Ingroup-outgroup categorization
  • Fast and frugal heuristics
  • Homophily

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