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Synopsis
The notion of bounded rationality was initiated in the 1950's by Herbert Simon. In this book the author 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 modelling bounded rationality, rather than on substantial economic implications. In the first part of the book the author considers the modelling of choice. After discussing some psychological findings, he proceeds to the modelling of procedural rationality, knowledge, memory, the choice of what to know and group decisions. In the second part, he discusses the fundamental difficulties of modelling bounded rationality in games. He begins with the modelling 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.
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About the Author
Ariel Rubinstein is Professor of Economics at Tel Aviv University and New York University.
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Modeling Bounded Rationality (Zeuthen Lecture Book Series)
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