Rational Choice Theory (Applications)

Topics: Rational choice theory, Choice theory, Dividend Pages: 2 (691 words) Published: July 29, 2013
TASK ASSIGNMENT Apply the rational choice theory in the context of your past or present work experience.

I can think of these examples that the Rational Choice Theory is applied: my membership in GMA’s Multi-Purpose Cooperative and participation in various volunteer activities. Cooperative I have joined GMA’s Multi-Purpose Cooperative since 2002 recognizing the optimum benefits from my savings versus the traditional bank savings deposit. Saving through COOP seems unfelt because it is deducted from our salary. It yields a much higher interest rate than bank. Besides, the total contribution can be withdrawn anytime without withholding tax; hence, it is readily available if needed, which is the very essence of savings. Our COOP has been giving annual cash dividends, the total profits from all its investments divided to its members based on our individual capital. Higher contribution means higher dividends. Because of this, I already maximized my monthly contribution so I can optimize what I can get out of my money. So far, dividends have been ranging from 6-8% per annum, much higher than banks. Other benefit that we enjoy through COOP is the cash or gadget/appliance loans, with adjustable terms of payment plus certain rebates. If I don’t apply for a loan, I still enjoy certain benefit from this activity i.e., the interests of those who availed of the loan are earnings of the COOP and COOP earnings mean mine and all other members. Recent additions to the benefits include college scholarships for dependents and insurance. These particular items I haven’t enjoyed yet but I feel secured that someday, I will be able to avail of these because of COOP. Aside from all of these, I can also build a strong social network together with several (if not all) COOP members. People connection is of course a lifetime benefit. Hence, joining COOP gives me both financial and social advantages. With the help of other members, I am able to optimize the value of my savings, something...
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