Bounded Rationality - Deepstash
Bounded Rationality

Bounded Rationality

Bounded rationality is a term associated with Herbert Simon’s work of the 1950s. According to this view, our minds must be understood relative to the environment in which they evolved. There are restrictions to human information processing, due to limits in knowledge and computational capacities.

While the idea of human limits to rationality was not a radically new thought in economics, Tversky and Kahneman’s ‘heuristics and biases research program made important methodological contributions. 30 years later, their thinking entered the mainstream.

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