Rationality and Qualitative Choice in an Institutionalist Framework: Will Much "Cruder and Simpler Arguments" Really Suffice?

Discrete choice modelling is concerned with the appropriate
specification of choice between qualitative alternatives. Choice in this context means either deliberate action by some individual or planning agency or the selection of a certain alternative by social, political or economic forces in the course of evolutionary processes. That latter concept is frequently evoked in the context of institutional choice, the transaction cost approach being just one although prominent approach to this problem. Discrete choice theory which is the theoretical underpinning of discrete choice modelling is firmly based on the principle of maximizing agents. At first sight, this seems to be contradictory
to institutionalist thinking, since most of that literature is explicitly or implicitly rooted in the assumption of bounded rationality and satisficing behaviour. To reconcile these two approaches it is necessary to demonstrate that for many purposes full versus bounded rationality or, for that matter, maximizing versus satisficing behaviour are not so much apart as is somtimes asserted. Our contention is that by properly specifying the informational and decisional background the gap between theses two approaches could be bridged. It will also be demonstrated that discrete choice theory, by avoiding aggregative thinking, is specifically apt to integrate the "objective and subjective determinants"
of a choice problem into a single approach. This is the reason why discrete choice theory cou1d be of he1p in the analysis of institutional choice and design.