A Tale of Two Rationalities: Decision-Making Between Cold War Formalism and Chicago Realism

Abstract Rational Choice Theory (RCT) has been central in social science research for decades, yet its intellectual lineage remains contested. This paper clarifies significant historical and methodological distinctions between two major traditions within RCT: the axiomatic, decision-theoretic approach emerging from Princeton, RAND, and other Cold War institutions, and the empirical, choice-oriented approach of the University of Chicago. Drawing on recent historiography, this paper examines why the influential historical accounts of Cold War social science consistently omit Chicago’s contributions. It challenges prevailing misconceptions by demonstrating that axiomatic RCT, with its emphasis on formalistic and mathematically driven decision-making models, developed independently and often in opposition to Chicago’s empirical emphasis on real-world decision-making, individual judgment, and market-oriented analysis. The paper also scrutinizes how scholarly neglect or confusion about these distinct lineages has led to persistent misinterpretations of both traditions. By distinguishing clearly between decision-making as control (axiomatic tradition) and decision-making as choice (Chicago tradition), the study enhances our understanding of the diverse intellectual roots and complex trajectories of Rational Choice Theory.