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Investments glossary

Rational Choice Theory


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JACK NICHOLSON: My point of view, while extremely cogent, is unpopular. LOS ANGELES TIMES: Which is? JACK NICHOLSON: That the repressive nature of the legalities vis-a-vis drugs are destroying the legal system and corrupting the police system. LOS ANGELES TIMES: Let\'s talk about acting for a minute.

— Jack Nicholson

Rational choice theory states that individuals use rational calculations to make rational choices and achieve outcomes that are aligned with their own personal objectives. These results are also associated with an individual’s best, self-interests. Using rational choice theory is expected to result in outcomes that provide people with the greatest benefit and satisfaction given the choices they have available.

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