Sociology Theory and Rational Choice Theory, Study notes of Sociological Theories

Download Sociology Theory and Rational Choice Theory and more Study notes Sociological Theories in PDF only on Docsity! 1 Sociological Theory and Rational Choice Theory PETER ABELL We may conveniently start with the words of Weber: "Sociology.….is a science which attempts the interpretive understanding of social action in order thereby to arrive at a causal explanation of its course and effects." Furthermore, "action is social when it takes account of the behaviour of others and is thereby orientated in its course" (Weber, 1947). Rational choice or action theory may be understood as one possible interpretation of Weber's program, though it must be said a rather special one in that it invites us to adopt the least complex conception of social action that we can analytically get away with in arriving at a "causal explanation of its course and effects." It thus departs from many post-Weberian (and for that matter pre-Weberian) theoretical traditions - particularly those of a phenomenological persuasion - where the purpose seems to tilt in an entirely opposing direction, namely to find ways of conceiving (social) actions which are locally detailed and complex. Why it should be that rational choice theory adopts this heterodox standpoint will detain us below. Even with all its manifest limitations rational choice theory has arguably proven to be the most successful theoretical framework in those social sciences which, like sociology, deal with explanations of macro or system-level phenomena and we should accordingly be somewhat circumspect before, following the persuasive voice of Parsons (1937), roundly rejecting it. Although we shall examine the assumptions of rational choice theory rather closely later on, a broad working definition (probably a little too broad for some) will help to get us started. In its broadest interpretation rational choice theory invites us to understand individual actors (which in specified circumstances may be collectivities of one sort or another) as acting, or more likely interacting, in a manner such that they can be deemed to be doing the best they can for themselves, given their objectives, resources, and circumstances, as they see them. It is perhaps appropriate here to insert a word of caution. In my view it would be dangerously partisan to argue for an exclusive reliance upon any single theoretical framework in sociology - the shape of the discipline is just too diverse for this to ring true. Indeed, all I wish to urge here is that rational choice theory may be the least bad theoretical framework at our disposal, for solving certain theoretical puzzles (Abell, 1992). This, as I hope to demonstrate, derives partly from its own strengths (albeit limited ones) but also from the weaknesses of its competitors. In this latter respect it will be up to the reader to compare the arguments contained here, with those in other chapters in this volume. I shall start by briefly introducing some past attempts to promote rational choice theory as a serious foundational framework for sociological theory. I have 2 intentionally kept this brief because overwhelmingly the most important developments are taking place currently and they bear only a passing relationship to what has gone before. Indeed, we have in the last decade or so witnessed a modest revolution in rational choice theory. Whether it will come to have any lasting impact upon the future direction of sociological theory only time will tell, but the reader wishing to become acquainted with the mainstream developments might like to refer to the early chapters in Coleman's Foundations of Social Theory (1990); also, for both advocacy and critique, to Coleman and Fararo's edited volume Rational Choice Theory (1992) and to Abell's Rational Choice Theory (1991). Cook and Levi's edited volume The Limits of Rationality (1990) is also a useful read, as is almost anything written by Elster though his Nuts and Bolts (1989a) must be given pride of place as an introductory text strongly coloured by a rational choice theory perspective. Those readers who prefer their theory diluted by sensitive qualitative empirical research will find Diego Gambetta's The Sicilian Mafia (1993) irresistible and Michael Hechter's Principles of Group Solidarity (1987) persuasive. The journal, with a sociological orientation, which is now established as the leading one in this field is Rationality and Society, published by Sage, though the Journal of Mathematical Sociology also contains many articles informed by a rational choice perspective. It is, however, important to appreciate that developments in adjacent disciplines may well in the longer term prove of equal importance: in this regard the reader might like to refer to Ordeshook's Game Theory and Political Theory (1986) and Kreps's Game Theory and Economic Modelling (1990). The latter provides a gentle introduction to a burgeoning technical literature which has taken economics by storm but which addresses many ideas, like trust and reputation, which were previously thought to be the exclusive province of the sociologist. This chapter is designed to afford the uninitiated reader an overview of the issues, which arise when adopting a rational choice theory perspective. By its very nature, though, it can only touch upon many of these. Furthermore, a number of the issues are quite technical; 1 have, however, chosen not to present things at all technically but, rather, where appropriate, to refer the reader to additional literature. It must be said, though, that the best way to gain an appreciation of the analytical potential of rational choice theory is to work through a few examples where it has proven to be successful. In this respect Rationality in Action (1990) edited by Paul K. Moser may prove useful. The Foundations of Rational Choice Theory in Contemporary Sociology Although one can easily find the roots of the very conception of a feasible systematic social inquiry in close association with Enlightenment precepts of rational conduct, it is to the nineteenth century that we must look for ideas, which have a strong contemporary resonance. Utilitarianism and Marxism both, in their own ways, make use of assumptions about individual rational actors, though Marxism has only recently regained a full recognition of its debts in this regard (Roemer, 1982; Elster, 1985). It is, nevertheless, to Pareto that we must look for a systematic analysis of inter-actor exchange, an idea, which now lies at the centre 5 exchanges), but my feeling is that, in the future, strategic exchange will be more at the centre of things. We now turn to analyse the implications of this feeling. The Nature of Theoretical Problems in Sociology A valid theory amounts to a reasoned conjecture about the nature of a more or less latent mechanism that purports to account for a puzzling "empirical" event or relationship. Although rational choice theorists have no reason to deride the oft-touted observation that empirical events and relationships are themselves cc theoretically described," in the sense that there is no pre-theoretical realm of facts at our disposal, they play down the importance of "descriptive theory" in our theoretical endeavours. In the spirit of the Weberian program with which 1 opened, the mechanisms may be further conjectured to involve the social actions of individuals. A simple diagram (see figure 9.1) adapted from one popularised by Coleman (1990) is helpful in giving some initial orientation. This diagram may initially be seen as a pointer to four generic types of causal relationship, each of which may require theoretical treatment. They are: 1 Macro, or system, level relationships: for example, how Protestant religious octrine causes the economic organisation of society (the example through- out is from Coleman (1990) courtesy of Weber). 2 Macro (or system) level to individual level (or micro) relationships: for example, how Protestant religious doctrine causes individual values. 3 Micro, or individual, relationships: for example, how individual values cause individual economic practices. Macro Causes 1 Macro outcomes 2 4 3 Micro (individual level) Micro (individual level) Causes action Figure 9.1 The Coleman-Lindenberg diagram 4 Micro, or individual, level to macro level relationships: for example, how individual economic practices cause the economic organisation of society. Although the diagram is disarmingly simple, and we shall have occasion to enlarge upon it, a few initial points may be made. First, from a rational choice theory point of view the explanation of type (1) relationships is usually made through the conjunction of the other three types. In other words, the latent mechanisms which generate the puzzling event at the macro level are usually deemed to operate through the micro (individual) level. Thus, rational choice theory's reductionism or methodological individualism. 6 Second, the diagram could be extended both upwards to "higher system levels" and downwards to sub-individual (pico) levels (Abell, 1992). For example, the system levels might concern, first, social groups, then organisations and thence societies! Third, the macro "variables" at the beginning and at the end of the relationship may be identical but denoted at separate points in time; whence the idea of maintenance (equilibrium!) of a macro state description. Rational choice theory in its most ambitious formulation seeks to provide where necessary (i.e. when they puzzle us) deductive models of types (2), (3), and (4) relationships so that they might be combined to procure an "understanding" of the "causal" generation of type (1) relationships. This ambitious objective is, however, often beyond our current technical grasp and much contemporary analysis is more restrictive, focusing attention upon the micro to macro relationship (type 4). As my opening remarks suggest, rational choice theory may be interpreted as one response to Weber's injunctions about causally understanding social action, so let us now return to Weber. Interpreting Social Actions Weber (quoted on p. 252) urges that sociology ought to be concerned to: interpretatively understand social action in order to obtain a causal explanation of its course and effects. The claims of rational choice theory are that: 1 interpretative understanding is to be achieved by adopting the simplest possible" model of individual rational choice of action; 2 social action is to be interpreted as "the simplest possible" model of interdependent actions (or interactions) of individuals; 3 causal explanations are to be established by the elucidation of type (2), (3), and (4) mechanisms. The effects for which we seek an explanation are ultimately at a system (macro) level and the causes are progressively sought backwards from the top right-hand corner of figure 9.1. The remainder of this chapter will be devoted to an analysis of these three objectives. Before, however, we embark upon this analysis a couple of general points need to be made: first, about the twice-employed phrase the simplest possible" and, second, about the nature of "interdependent actions." As we had occasion to note above, modern rational choice theory departs from much contemporary sociological theory precisely because it exhorts us to find simple models. In fact it does this twice over, for it invites, both a simple model of the individual actor and a simple model of his or her interactions. Why should this be so? It springs from the overall analytical providing an explanation at the macro level. It is infrequently appreciated by its many detractors that 'rational choice 7 theory is proffered not as a descriptively accurate (realistic) model of individuals or their interactions but as a simplification thereof designed to render highly complex mechanisms which cannot be observed directly theoretically tractable. Rational choice theory might prove to be the wrong theoretical simplification in this respect; if so another one will be needed, but the point is that it would normally be wrong, if this happens, to reach for the rich descriptive vocabularies of interactionists and phenomenologists or psychologists. Of course if these vocabularies are empirically accurate then the sparse abstractions of rational choice theory must necessarily not be inconsistent with them. But how should we decide upon what sort of simplification to settle upon which is not inconsistent with received wisdom from these directions? Lindenberg (1992) draws our attention to two important criteria: minimum information per actor and the adoption of models that can be systematically and progressively complicated (i.e. made more "realistic") as need be. But how should we interpret the phrase "need be" and how are we to know where the minimum information per actor requirement places us? Although I don't think these sort of issues have been fully worked out we can perhaps make a tentative start (Lindenberg is essential reading on these matters). Again we return to the overall explanatory objective - namely to account for a macro level outcome. Coleman (1990: 2) as always puts it well: The focus must be on the social system whose behaviour is to be explained. This may be as small as dyad or as large as a society or even a world system, but the essential requirement is that the explanatory focus be on the system as a unit, not on the individuals or other components which make it up. Now, intuitively, the simplicity of the models we should adopt of both individuals and their interactions will be directly proportional to the complexity of the "system whose behaviour is to be explained." If the system itself is simple - e.g. a dyad - we may be in a position to select a fairly rich model and vice versa. But, in addition, simplicity will be a function of the distinctions we wish to preserve at the system level. We may, as it were, proceed backwards making these distinctions one constraint, among others, in determining the optimal simplification of our models. The maxim of no emergent distinctions is central. That is to say, a distinction (i.e. the boundaries of an equivalence class) at the system (macro) level implies (is necessary and sufficient for) a distinction in its generating mechanisms (i.e. the interacting individuals) at the micro level. Putting it succinctly, there are no macro distinctions without micro distinctions. The reverse is, though, not true: there may be micro distinctions without there being any macro distinctions, in the sense that diverse micro processes may produce equivalent macro outcomes. But we are not theoretically interested in the former and, therefore, may select models of individuals and their interactions, which elide such distinctions. Thus, the complexity of such models is determined largely by the level of discrimination we require at the macro level. We should adopt models, which are as complex as is necessary to determine distinctions drawn at the macro level. 10 The uninitiated reader might quite legitimately feel entirely dismayed when faced with this list. First, a number of the constituent terms have not yet been defined. Second, even if they were, surely, it is easy to think of situations where actions are neither self-regarding nor, most likely, optimally chosen, whatever this latter phrase might mean. Third, is it not the case that sociologists often wish to embrace super-individual entities (collective actors) in their theoretical endeavours? A partial answer to these worries might be forthcoming if we analyse each of the assumptions a little more closely. Turning first to individualism; it would be inappropriate here to rehearse tired debates about methodological individualism, reductionism, and related ideas as these have on balance not served sociology well (O'Neill, 1973). Many sociologists, however, following Durkheimian leads, will no doubt wish to part company from the start. This eventuality would be unfortunate, for all that rational choice theorists are tied to is the assertion that macro or system level causal relationships (type (1) in figures 9.1 and 9.2) are shorthand for the conjunction of type (2), (3), and (4) relationships. A puzzling connection between two system level variables must imply mechanisms involving a more micro level of analysis. This will usually, though not invariably, be the individual level, as rational choice theory is perfectly at one with a nested version of figure 9.2 which allows for intermediate levels lying between the individual and the chosen macro levels (e.g. groups between individuals and "societies"). Then the perspective allows for different degrees of reduction, although if a relationship at any level above that of the individual is deemed puzzling then ultimately a reduction must be carried out down to the individual level. The theoretical question is this: how has the system level relationship been generated by the social actions of individuals? The individualism of rational choice theory necessitates no deeper a commitment than this, and what should be clear is that it does not, contrary to some critical portrayals, disavow the importance of system level relationships, or assert an asocial model of the individual or, indeed, deny the exogenous "primacy" of a group or institutions in accounting for a given social outcome. In the face of persistent institutions, however, the rational choice theorist will usually seek an account of their genesis. So, institutions, themselves, become macro outcomes in need of explanation, although - once again in the spirit of figure 9.2 - such an explanation may invoke prior institutions. In this context and many others it is useful, in order to fix the nature of the explanatory problems in hand, to conceive of a backwards (in time) iteration, as in figure 9.2. Next, consider "optimality;" let us say, given the set of opportunities faced, an individual chooses optimally if no other (social) action exists whose consequences he or she prefers to the chosen course of action. A word about "transitivity:" most formal treatments of rational choice theory make assumptions whereby, if A is preferred to B and B to C, then A will be preferred to C. This does seem rather reasonable, almost, we might say, following from the idea of preference itself. Experimental evidence, however, suggests that people do not always preserve transitivity (Kahneman and Tversky, 1990). Furthermore, 11 people are sometimes not able either to compare options (partial ordering) or, if they can, to choose between them (weak ordering or indifference). Although problems like this, which might be quite common in sociological phenomena, create difficulties for rational choice theory they are not insuperable and need not detain us here. Certainly, in the spirit of selecting "simple" models of the actor we will often not be far off the mark in assuming actors themselves select a course of action which dominates their ranked alternatives. If people were to act insistently in a way that is inconsistent with their preferences this would certainly bring rational choice theory to its knees. The major alternative assumptions seem to be that: 1 individuals characteristically do not act optimally in terms of their preferences; 2 although individuals may act optimally in terms of their preferences, the preferences themselves are not optimally formed; 3 individuals do not act upon preferences at all, but are driven by forces beyond their control. In order to judge the warrant for the strong claims of optimality which rational choice theory enjoins upon us, it is helpful to look at these alternatives. Acting in Terms of Preferences To maintain that, in the general course of things, actions are knowingly chosen so, as not to optimise satisfaction is surely otiose. Certainly, some cases are well documented, by Elster (1989b) among others, in which weakness of will may be said to prevent people from acting in the way they prefer - that is, according to their better judgement. Furthermore, at times we act impulsively, which in retrospect we find distasteful, and we may also be possessed by our desires which then cloud our reason. All of this and perhaps more must be acknowledged, but to raise these peripheral matters to a position of central importance in modelling micro-macro mechanisms would be, to say the least, counterproductive. Note that nothing that has been said so far holds one to the view that the dominant preferences upon which the actor is deemed to act necessarily represent his or her best course of action in the sense that the preferences themselves are optimally constructed. We are held merely to the view that, whatever preferences the actor happens to have, he or she pursues a course of action, which is optimal with respect to them. It the second point above which is more problematic for rational choice theory. Formation of Preferences So let us now examine the formation of preferences. Some, particularly economists, take the view that preferences are not only fairly universal and stable (when compared with opportunities which, it is supposed, account for variations in action) but are also formed in ways that entirely resist the attentions of rational choice theory. Their genesis is either uninteresting or, if not, entirely beyond the 12 grasp of rational choice theory. Most sociologists, however, reject the first view, though they have considerable sympathy with the latter. Clearly an actor's preference driven actions will depend upon (1) the actor's beliefs or reasoning (often in a probabilistic form) about the consequences of the available actions (i.e. the opportunities); (2) the affect for the consequences and perhaps for the actions themselves (consummatory actions). This is very much the language of sociology but viewing preferences as derivative of beliefs and affects, in this way, is entirely consistent with expected utility theory (see, for instance, Luce and Raiffa's essay in Moser, 1990) which in one way or another underlies much rational choice theory. So when it is claimed that preferences are not optimally formed (the second major assumption made above) this can be reduced to more elementary claims. The first is that the preferences are not optimally formed with respect to beliefs and affects. It has to be conceded that for this evidence (in laboratory conditions) is now accumulating (see, for instance, the decision biases found in prospect theory (Kahneman and Tversky, 1990)). Whether these findings should detain the sociological theorist seeking to use simple models of the individual actor to explain macro outcomes, is a moot point, though Lindenberg's (1993) careful analysis of "framing" shows what can be done. Wherever the truth lies, it should be appreciated that developments of this sort are very much within the spirit of a broad approach to rational choice theory and certainly confer paradigmatic privilege (see below). The second claim is that the actor's beliefs are not optimally formed. Precisely what optimal belief formation implies is a complex matter (Elster, 1989b) but usually means something like this: given an actor's affects (wants), the information available I collected is sufficient to enable the actor to form beliefs about the possible courses of action available and their consequences so that a better alternative (given the actor's affects) will not be ignored. In fact a great deal of contemporary rational choice theory is devoted to the impact of incomplete information - particularly in the theory of games - upon social action. More generally, modern rational choice theory takes assumptions about information as a central analytical issue. It appears, therefore, that advocates of some of the more traditional approaches to sociological theory and rational choice theorists need not fall out over issues of preference formation; indeed there are some grounds for optimism that a common framework might eventually be synthesised (Abell, 1992). All can agree that modelling both the nature and causes of the prevailing information conditions in which actors find themselves or create for themselves, and their attendant beliefs and reasoning, is often at the heart of the sociological enterprise (Boudon (1989) is particularly informative on these matters). In the final analysis all that rational choice theorists need to hold on to is a rather weak model of optimality whereby actors are satisficers (Simon, 1982) and do the best they can, given their circumstances as they see them. According to this way of thinking the ultimate exogenous factors are an actor's affects. Some critics of rational choice theory feel that one of its shortcomings derives from the assumption of exogenous preferences. If, however, the arguments just outlined have anything to recommend it, this criticism should be 15 what he or she may do. The actor can take the action, and consequences thereof, of others as a given. The action environment of the focal actor is unreactive to what he or she does except insofar as others may subsequently act parametrically with respect to the action (or consequences) of the focal actor's action. Actors can be parametrically interdependent if each treats the other as an environmental given in this manner. Strategic social actions, on the other hand, arise when an actor needs to calculate what others are doing or will do dependent upon his or her action, in deciding what to do. The action environment is reactive to what he or she does. If actors are mutually strategically dependent they are strategically interdependent. Game theory is the rational choice theorist's theory of strategic interdependence. It is theoretically helpful to start with independence and then to progressively complicate the picture. Doing so is entirely consistent with our earlier plea for the adoption of the simplest model we can possibly find. A great deal of "sociological research" does in fact treat units of analysis -more often than not individuals - as acting or acquiring their characteristics independently of one another. For instance, most regression-based studies search for the "causes" of individual characteristics by regressing them onto individual level exogenous variables for the same individual. This achieves the simplest possible type (2) explanation (figures 9.1 and 9.2). When we do this the macro level relationship (type (4)) is merely one between the distributions of the exogenous and endogenous variables. We can speak of the aggregation of independently drawn units of analysis. A good example is the relationship between an individual's socio-economic status of origin and destination (social mobility). Theoretical precepts are introduced to this framework by incorporating elements of an individual's "social environment" - indeed social status of origin may be deemed as such. As before, nevertheless, the units do not act (or acquire characteristics) interdependently, but in terms of a common or diverse environment, as the case may be (type (1) in figure 9.1). If the endogenous variable in such an exercise describes individual actions then the environment variable is parametric - it is taken as given and not responsive to what the focal actor does. Insofar as rational choice theory might be involved, it would take the form of showing how, other things equal and given the environment, the outcome was the best the actors could do for themselves. By and large, those who study social mobility have not found the near universal connection between status of origin and destination, especially when explicated by intervening variables, sufficiently puzzling to warrant detailed theoretical treatment. Whilst staying within the framework of parametric environments there are a number of ways in which actors' interdependencies (social actions) can be built into a model. First, one may instance cross-level models, whereby the actions of individuals are taken to be a function of the mean values (or some other parameter) of either the endogenous or exogenous variable in the group or the population from which the individuals are drawn (sometimes called structural or compositional effects). Perhaps the best-known example of this is the dependence of individual achievement scores upon not only individual ability 16 scores but the mean ability and/or achievement scores in the individuals' group or social environment. There are good rational choice theories of this finding (E.g. De Vos, 1989), which is usually deemed to be rather puzzling. Structural or compositional models offer us a rather gross picture of the parametric dependence of each individual upon others in his or her social environment but do not fundamentally alter the aggregation process. The units are still regarded as independent, but with individual level scores derived from those who surround them. A more detailed picture of individual interdependence is provided by models of endogenous and exogenous autocorrelation (Anselin, 1988'). Here the units of analysis (e.g. actors) are explicitly linked to one another in the sense that the scores on their endogenous variable are a function of the scores of at least some of the other actors' endogenous and/or exogenous variables. Endogenous autocorrelation may be used to model the interdependence of the actions of individuals as a consequence of their location in an "influence structure." Aggregation to the macro level still produces only a distribution of the endogenous variable, but one that now depends crucially upon the pattern of connectivity of the actors at the micro level. Rational choice theorists take a particular interest in "influence structures" when, in highly uncertain environmerits, it becomes rational (the best thing to do) for actors to copy those around them - rational mimetics (Abell, 1991). Modelling of this sort links rational choice theory into theories of social contagion as well as into network theories. Although these models are used largely to study the parametric dependence of an actor upon those other actors to whom the first actor is connected, and where the structure is exogenously given, there is no intrinsic reason that this should be the case. Markov models, which purport to show how rational actors construct connections to others, are possible (Leenders, 1993) and the two-way interdependence so generated may be given a strategic interpretation (see below). Social exchange interdependencies are perhaps the most intensively studied in the sociological literature. In the spirit of our basic distinction, it is useful to distinguish between parametric and strategic models. Though the latter are the more fundamental, the former are the more thoroughly analysed, Coleman's Foundations of Social Theory being the canonical source. Parametric exchange models largely ape competitive models in economic theory by assuming that exogenously endowed individuals trade to a Pareto Equilibrium under given (i.e. parametric) rates of exchange (prices). The details of the movement to the equilibrium - that is, the macro outcome - are abstracted away. Strategic models, on the other hand, invite us to analyse the tactics of the actors in arriving at rates of exchange. Here, the precepts of game theory become central in understanding the macro outcome (see below). Coleman has also provided extensive analysis of actions and social actions, which generate externalities (i.e. impacts), for other parties; it is externalities, which create the need for social norms. Coleman has thus promoted a theory of "the 17 demand for and supply social norms, whilst working from a rigorous rational choice perspective. Again this theory is parametric in structure. One further way in which social actions can come about is where actors actually have (inter) dependent utilities/preferences. We encountered other regarding sentiments above. These sorts of utilities in effect build externalities into the reasoning of actors. So far, we have concentrated almost exclusively upon parametric social actions; however, current research strongly directs our attention toward strategic situations. Of course, in the light of our earlier plea for simple models, it is always important to see how far parametric models can take us, before moving onto strategic ones, as the former are generally more simple. If they fail, however, the complexities of strategic situations must be addressed. Social Action and Game Theory Game theory extends the theory of rational individual action to situations where actors take other actors' actions into account when acting themselves. So the fate of an actor depends not only upon his or her own actions but also upon the actions of others, and the outcome, one of a set of possible outcomes, is generated by more than one actor. Many micro-macro mechanisms have a complex strategic structure and it is to game theory that we have to look in attempting to unravel their complexity Although game theory increasingly lies at the centre of modern sociological theory it has unfortunately not yet become staple fare in sociological theory courses and is therefore little understood. This creates a difficulty in that the space constraints of a single chapter preclude a full-blown introduction, yet it is inappropriate to assume too much. The best approach 1 can think of is to sketch the potential role of game theory making use of standard concepts, each of which is italicised in the text. Readers who are conversant with these and wish to know more can refer to any standard text on game theory. I have tried to cover the minimum set of concepts that the contemporary social theorist needs in order to gain some orientation in this field. For those who want to take things further, Binmore's Fun and Games (1992) is both readable and takes the reader near to the intellectual frontiers; others may prefer to go back to Games and Decisions (1957) by Luce and Raiffa, or to look at Myerson's Game Theory: Analysis of Conflict (1991) or Games and Information (1989) by Ramusen. Hamburger's Games as Models of Social Phenomena (1979) gives an impression of the range of possible applications. Rationality and Society, vol. 4, no. 1 (1992) is concerned with game theory in the social sciences. Raub and Weesie's Sociological Applications of Game Theory (1992) offers a very concise introduction to the field. At the most general level game theory can be used to clarify the nature of strategic situations and wherever possible to point to an equilibrium solution (sometimes a dominant equilibrium, usually a Nash Equilibrium or some refinement thereof) which predicts the actions (strategies) which each rational 20 analysis, is an assumption whereby individuals do the best they can, given their preferences over the opportunities that they see as facing them. The mechanisms which link individual social actions to social outcomes (not necessarily intended) are frequently complex (Abell, 1993), involving many actors and intricate patterns of strategic and parametric interdependence. The only framework we possess at the moment for engaging this complexity is game theory - even with all its limitations. However, the mechanisms characteristically possess an additional complexity, which calls for special attention: By complex I mean the sort of sequential material which a rich historically based case study characteristically provides. Case studies of this sort usually possess a number of features. First, they often involve many actors (units of analysis) the actions of which are parametrically or strategically interdependent; second, these actors/units may be at different levels of aggregation, e.g. individuals and collectivities of one sort or another; third, the aggregation may change in the course of the narrative, e.g. the creation of an effective collectivity; fourth, there may be complex patterns of parallel processing, that is branching and recombination of sub-plots; fifth, the time signature of parallel processing might be on a different scale. (Abell, 1993) If this sort of complexity is to be theoretically grasped we have to develop ways of dealing with it. From a game theoretic point of view, it is likely that a number of games are going on at the same time, the outcomes of which are parametrically linked. We need ways of describing these complex processes such that they can be treated as "sequential facts" and then, hopefully, as equilibrium paths in the constituent games. In recent years a number of techniques have been developed which direct our attention towards sequences of interactions as the factual basis of sociology (e.g. Abbot, 1984: sequence analysis; Fararo and Skvoretz, 1984: productionsystems; Abell, 1987; 1993: narrative analysis; Heise, 1990: event structure analysis). Though these techniques are not necessarily tied to a rational choice theory framework, the connection can easily be made. Directing sociological theory back towards the provision of explanations of sequences of interactions (which generate macro outcomes) is perhaps the most significant recent turn in the world of social theory (Fararo, 1989). Similarly, the complex macro to micro processes which establish our beliefs, affects, and norms/values (constitutive of our preferences) and structure our opportunities are also notably sequential and will eventually require parallel treatments. Armed with these sorts of analysis we will finally begin to realize Weber's ambitions to achieve an interpretative understanding of social action in order thereby to arrive at a causal explanation of its course and effects. 21 References The entries marked * will provide the basis for any introductory course to social theory. Abbot, A. 1984: Event sequence and event duration: colligation and measurement. Historical Methods, 17, 192-204. Abell, P. 1987: The Syntax of Social Life. Oxford: Oxford University Press. *-1991: Rational Choice Theory. Aldershot: Elgar. -1992: Is rational choice theory a rational choice of theory? In Coleman and Fararo (1992). -1993: Narrative method: a reply. Journal of Mathematical Sociology, 16, 253-66. 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