Abstract
The term ‘bounded rationality’ is used to designate rational choice that takes into account the cognitive limitations of the decision-maker — limitations of both knowledge and computational capacity. Bounded rationality is a central theme in the behavioural approach to economics, which is deeply concerned with the ways in which the actual decision–making process influences the decisions that are reached.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
Bibliography
Cyert, R.M. and March, J.G. 1963. A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall; 2nd edn, 1975.
Hogarth, R.M. 1980. Judgment and Choice: The Psychology of Decision. New York: Wiley.
Nelson, R.R. and Winter, S.G. 1982. An Evolutionary Theory of Economic Change. Cambridge, Mass.: Harvard University Press.
Newell, A. and Simon, H.A. 1972. Human Problem Solving. Englewood Cliffs, NJ: Prentice-Hall.
Savage, L.J. 1954. The Foundations of Statistics. New York: Wiley.
Simon, H.A. 1982. Models of Bounded Rationality. 2 vols, Cambridge, Mass.: MIT Press (especially Sections VII and VIII).
Williamson, O. 1975. Markets and Hierarchies. New York: Free Press.
Editor information
Copyright information
© 1990 Palgrave Macmillan, a division of Macmillan Publishers Limited
About this chapter
Cite this chapter
Simon, H.A. (1990). Bounded Rationality. In: Eatwell, J., Milgate, M., Newman, P. (eds) Utility and Probability. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20568-4_5
Download citation
DOI: https://doi.org/10.1007/978-1-349-20568-4_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-333-49541-4
Online ISBN: 978-1-349-20568-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)