Bounded Rationality
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Bounded Rationality
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Author : Gerd Gigerenzer
language : en
Publisher: MIT Press
Release Date : 2002-07-26
Bounded Rationality written by Gerd Gigerenzer and has been published by MIT Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-07-26 with Business & Economics categories.
In a complex and uncertain world, humans and animals make decisions under the constraints of limited knowledge, resources, and time. Yet models of rational decision making in economics, cognitive science, biology, and other fields largely ignore these real constraints and instead assume agents with perfect information and unlimited time. About forty years ago, Herbert Simon challenged this view with his notion of "bounded rationality." Today, bounded rationality has become a fashionable term used for disparate views of reasoning. This book promotes bounded rationality as the key to understanding how real people make decisions. Using the concept of an "adaptive toolbox," a repertoire of fast and frugal rules for decision making under uncertainty, it attempts to impose more order and coherence on the idea of bounded rationality. The contributors view bounded rationality neither as optimization under constraints nor as the study of people's reasoning fallacies. The strategies in the adaptive toolbox dispense with optimization and, for the most part, with calculations of probabilities and utilities. The book extends the concept of bounded rationality from cognitive tools to emotions; it analyzes social norms, imitation, and other cultural tools as rational strategies; and it shows how smart heuristics can exploit the structure of environments.
Bounded Rationality
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Author : Graham Mallard
language : en
Publisher:
Release Date : 2020-05-29
Bounded Rationality written by Graham Mallard and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-05-29 with categories.
This short book introduces the field of bounded rationality to a beginning readership in economics. It is intended to be a tour of the key concepts involved in the modelling of bounded rationality, the approaches that have been adopted and some of the most revealing, and at times surprising, findings that have been generated. The book explores how bounded rationality has been used in economic models to shed light on real life behaviour and how doing so has led to specific policy implications that would otherwise have gone unappreciated. The exposition is intended to be non-technical and free from any mathematical expressions and workings and the focus throughout is primarily on the behaviour of individuals or organisations within given situations rather than on macroeconomic concerns. How the field has evolved since the 1950s and the strengths and weaknesses of its current research programme, including its relationship with behavioural economics, are assessed. Understanding how we take economic decisions and how we depart from rational choice theory has become fundamental to understanding the workings of the economy at all levels. The book is therefore excellent preparatory reading for degree-level courses in economics as well as specific courses in behavioural economics and philosophy of economics.
Routledge Handbook Of Bounded Rationality
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Author : Riccardo Viale
language : en
Publisher: Routledge
Release Date : 2020-12-02
Routledge Handbook Of Bounded Rationality written by Riccardo Viale and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-12-02 with Business & Economics categories.
Herbert Simon’s renowned theory of bounded rationality is principally interested in cognitive constraints and environmental factors and influences which prevent people from thinking or behaving according to formal rationality. Simon’s theory has been expanded in numerous directions and taken up by various disciplines with an interest in how humans think and behave. This includes philosophy, psychology, neurocognitive sciences, economics, political science, sociology, management, and organization studies. The Routledge Handbook of Bounded Rationality draws together an international team of leading experts to survey the recent literature and the latest developments in these related fields. The chapters feature entries on key behavioural phenomena, including reasoning, judgement, decision making, uncertainty, risk, heuristics and biases, and fast and frugal heuristics. The text also examines current ideas such as fast and slow thinking, nudge, ecological rationality, evolutionary psychology, embodied cognition, and neurophilosophy. Overall, the volume serves to provide the most complete state-of-the-art collection on bounded rationality available. This book is essential reading for students and scholars of economics, psychology, neurocognitive sciences, political sciences, and philosophy.
Utility And Probability
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Author : John Eatwell
language : en
Publisher: Springer
Release Date : 1990-02-23
Utility And Probability written by John Eatwell and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 1990-02-23 with Business & Economics categories.
This is an excerpt from the 4-volume dictionary of economics, a reference book which aims to define the subject of economics today. 1300 subject entries in the complete work cover the broad themes of economic theory. This extract concentrates on utility and probability.
Modeling Bounded Rationality
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Author : Ariel Rubinstein
language : en
Publisher: MIT Press
Release Date : 1998
Modeling Bounded Rationality written by Ariel Rubinstein and has been published by MIT Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998 with Business & Economics categories.
The notion of bounded rationality was initiated in the 1950s by Herbert Simon; only recently has it influenced mainstream economics. In this book, Ariel Rubinstein defines models of bounded rationality as those in which elements of the process of choice are explicitly embedded. The book focuses on the challenges of modeling bounded rationality, rather than on substantial economic implications. In the first part of the book, the author considers the modeling of choice. After discussing some psychological findings, he proceeds to the modeling of procedural rationality, knowledge, memory, the choice of what to know, and group decisions.In the second part, he discusses the fundamental difficulties of modeling bounded rationality in games. He begins with the modeling of a game with procedural rational players and then surveys repeated games with complexity considerations. He ends with a discussion of computability constraints in games. The final chapter includes a critique by Herbert Simon of the author's methodology and the author's response. The Zeuthen Lecture Book series is sponsored by the Institute of Economics at the University of Copenhagen.
Bounded Rationality And Industrial Organization
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Author : Ran Spiegler
language : en
Publisher: OUP USA
Release Date : 2011-02-18
Bounded Rationality And Industrial Organization written by Ran Spiegler and has been published by OUP USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-02-18 with Business & Economics categories.
Ît then rigorously analyses each model in the tradition of microeconomic theory, leading to a richer, more realistic picture of consumer behavior. Ran Spiegler analyses phenomena such as exploitative price plans in the credit market, complexity of financial products and other obfuscation practices, consumer antagonism to unexpected price increases, and the role of default options in consumer decision making. Spiegler unifies the relevant literature into three main strands: limited ability to anticipate and control future choices, limited ability to understand complex market environments, and sensitivity to reference points. Although the challenge of enriching the psychology of decision makers in economic models has been at the frontier of theoretical research in the last decade, there has been no graduate-level, theory-oriented textbook to cover developments in the last 10-15 years.
Models Of Bounded Rationality
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Author : Univ Of Chicago
language : en
Publisher: Mit Press
Release Date : 1997-07
Models Of Bounded Rationality written by Univ Of Chicago and has been published by Mit Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997-07 with Business & Economics categories.
Offering alternative models based on such concepts as satisficing(acceptance of viable choices that may not be the undiscoverableoptimum) and bounded rationality (the limited extent to which rationalcalculation can direct human behavior), Simon shows concretely whymore empirical research based on experiments and direct observation, rather than just statistical analysis of economic aggregates, isneeded.
Bounded Rationality And Behavioural Economics
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Author : Graham Mallard
language : en
Publisher: Routledge
Release Date : 2015-08-14
Bounded Rationality And Behavioural Economics written by Graham Mallard and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-08-14 with Business & Economics categories.
Economics Nobel Laureate Herbert Simon developed the concept of bounded rationality in the 1950s. This asserts that the cognitive abilities of human decision-makers are not always sufficient to find optimal solutions to complex real-life problems, leading decision-makers to find satisfactory, sub-optimal outcomes. This was a foundational component of the development of Behavioural Economics but in recent years the two fields have diverged, each with its own literature, its own approach and its own proponents. Behavioural Economics explores the areas of commonality between Economics and Psychology, in terms of its focus and its approach, whereas the bounded rationality literature largely analyses the implications of sub-optimal decision‐making through the mathematically sophisticated methodology of mainstream Economics. This book examines the nature and consequences of this divergence and questions whether this is a case of beneficial specialisation or whether it is unhelpful, potentially stunting the development of some aspects of Economics. It has been suggested that the major deficiency of Behavioural Economics is that it has failed to produce a single, widely applicable alternative to constrained optimisation. This book evaluates the extent to which this is the true and, if it is, the extent to which it is a product of the divergence between the two literatures. It also seeks to identify commonalities between the two subjects and suggests avenues of research in Economics that would benefit from a re-fusion of these two fields.
Bounded Rationality And Public Policy
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Author : Alistair Munro
language : en
Publisher: Springer
Release Date : 2009-06-23
Bounded Rationality And Public Policy written by Alistair Munro and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-06-23 with Business & Economics categories.
This book is about bounded rationality and public policy. It is written from the p- spective of someone trained in public economics who has encountered the enormous literature on experiments in decision-making and wonders what implications it has for the normative aspects of public policy. Though there are a few new results or models, to a large degree the book is synthetic in tone, bringing together disparate literatures and seeking some accommodation between them. It has had a long genesis. It began with a draft of a few chapters in 2000, but has expanded in scope and size as the literature on behavioural economics has grown. At some point I realised that the geometric growth of behavioural - search and the arithmetic growth of my writing were inconsistent with an am- tion to be exhaustive. As such therefore I have concentrated on particular areas of behavioural economics and bounded rationality. The resulting book is laid out as follows: Chapter 1 provides an overview of the rest of the book, goes through some basic de?nitions and identi?es themes.
Bounded Rationality In Decision Making Under Uncertainty Towards Optimal Granularity
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Author : Joe Lorkowski
language : en
Publisher: Springer
Release Date : 2017-07-01
Bounded Rationality In Decision Making Under Uncertainty Towards Optimal Granularity written by Joe Lorkowski and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-01 with Technology & Engineering categories.
This book addresses an intriguing question: are our decisions rational? It explains seemingly irrational human decision-making behavior by taking into account our limited ability to process information. It also shows with several examples that optimization under granularity restriction leads to observed human decision-making. Drawing on the Nobel-prize-winning studies by Kahneman and Tversky, researchers have found many examples of seemingly irrational decisions: e.g., we overestimate the probability of rare events. Our explanation is that since human abilities to process information are limited, we operate not with the exact values of relevant quantities, but with “granules” that contain these values. We show that optimization under such granularity indeed leads to observed human behavior. In particular, for the first time, we explain the mysterious empirical dependence of betting odds on actual probabilities. This book can be recommended to all students interested in human decision-making, to researchers whose work involves human decisions, and to practitioners who design and employ systems involving human decision-making —so that they can better utilize our ability to make decisions under uncertainty.