Models of bounded rationality: The approach of fast and frugal heuristics

Details

Serval ID
serval:BIB_33265
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Models of bounded rationality: The approach of fast and frugal heuristics
Journal
Management Revue
Author(s)
Hoffrage U., Reimer T.
ISSN
0935-9915
Publication state
Published
Issued date
2004
Peer-reviewed
Oui
Volume
15
Number
4
Pages
437-459
Language
english
Abstract
In a complex and uncertain world, humans draw inferences and make decisions under the constraints of limited knowledge, resources, and time. Herbert Simon, with his call for models of bounded rationality, can be seen as one of the fathers of the recently initiated research program on "simple heuristics that make us smart" (Gigerenzer/Todd/the ABC Research Group, 1999). These heuristics perform well because they are ecologically rational: they explore the structure of environmental information and are adapted to this structure. The present review paper introduces the key concepts of this research tradition, and provides two examples: (1) The recognition heuristic, which exploits a partial lack of knowledge, and (2) Take The Best, a simple lexicographic strategy that deliberately ignores information although it is available. The paper explains their ecological rationality, provides empirical evidence of their use, and illustrates some of their applications in consumer behaviour and group decision making. Finally, this research program is related to various notions of rationality.
Keywords
Bounded rationality, Ecological rationality, Recognition heuristic, Simple heuristics, Take the best
Create date
19/11/2007 10:03
Last modification date
20/08/2019 13:19
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