Why Bounded Rationality?

1. Why Bounded Rationality? ¿Por qué “racionalidad limitada”? ¿Por qué no “racionalidad ilimitada”?

2. Cuatro razones por las cuales se incorpora la racionalidad “limitada” en los modelos económicos: I) Evidencia de que es importante II) Los modelos de “RL” son novedosos y amplios III) Fallan la justificaciones de asumir una racionalidad ilimitada IV) Reducción de costos

3. I) Spoiling a good story: evidence of bounds on rationality 1) Direct evidence-rationality tests on single individuals. 2) Confounded evidence-testing economic rationality jointly with other hypotheses

4. II) Bounded Rationality in Economic Models: A Sampler 1) Firms, organizations and institutions. 2) X-Inefficiency 3) Boundedly rational choice – early models

5. II) Bounded Rationality in Economic Models: A Sampler 4) Boundedly rational choice – heuristics, norms, and other imports from sister disciplines 5) Evolutionary Economics 6) Bounded rationality and market outcomes

6. II) Bounded Rationality in Economic Models: A Sampler 7) Evolution to rational expectations in markets 8) Near rationality, complexity, and market outcome 9) Self-organizing markets

7. II) Bounded Rationality in Economic Models: A Sampler 10) Population distribution models 11) Games 12) Dynamics and simulation 13) Classifier systems

8. II) Bounded Rationality in Economic Models: A Sampler 14) Economy of the mind – deliberation technologies and deliberation cost

9. III. Yes, But As If: Arguments for Unbounded Rationality 1) “As if” 2) Learning 3) Survivors and tricksters 4) Do not quarrel with sucess

10. III. Yes, But As If: Arguments for Unbounded Rationality 5) Sidewalk twenties 6) Discipline and “ad hocery” 7) Tractability and definite outcomes 8) Definition

11. IV. No free lunch, Yes bounded rationality 1) Economizing Economizing: the regress issue 2) An example on the regress issue 3) Four rationalities

12. IV. No free lunch, Yes bounded rationality 4) Ex Ante vs. Ex Post Posts: Similarities of Deliberation Cost and Information Cost 5) Elephants in the Living Room

13. Frases Hamlet: “What a piece of work is a man! How noble in reason! How infinite in faculties!” Puck: “Lord, what fools these mortals be!”