Bounded Rationality and Politics
In Bounded Rationality and Politics, Jonathan Bendor considers two schools of behavioral economics-the first guided by Tversky and Kahneman's work on heuristics and biases, which focuses on the mistakes people make in judgment and choice; the second described by Gerd Gigerenzer's program on fast and frugal heuristics, which emphasizes the effectiveness of simple rules of thumb. Finding each of these radically incomplete, Bendor's illuminating analysis proposes Herbert Simon's path-breaking work on bounded rationality as a way to reconcile the inconsistencies between the two camps. Bendor shows that Simon's theory turns on the interplay between the cognitive constraints of decision makers and the complexity of their tasks and explains how this led Simon to a view of bounded rationality that is subtly dualistic. This half-empty, half-full dualism is explored in detail by rigorously modeling some of the most famous heuristics in the bounded rationality research program: satisficing, incrementalism, and putting-out-fires.
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Aaron Wildavsky action adjustment agency agency’s agent alternatives analysis aspiration level aspiration-based assume assumptions behavior Bendor bounded rationality budgeting chapter chess choice arena claim cognitive constraints cognitive science complex computer model contexts decision makers decision theory dimension distribution domain E[Vt effect empirical energy evaluation example expected expertise fluid participation garbage can processes garbage can theory Gigerenzer given Hence heuristic human hypothesis idea implies important incremental search individual informal theory institutions judgment Kahneman Landau learning Lindblom majority inconsistent March and Olsen normative options organizational organized anarchies outcomes payoffs performance period political science political scientists predictions probability problem-solving problems properties proposition prospect theory rational choice rational choice theory redundancy research program result satisficing scholars scientific Simon Simon’s simulation solutions solving standard stationary status quo stochastically dominates strategies stringency level structure suboptimal Suppose theorem theory’s Tversky type II errors verbal theory versus voter voting weakly competent Wildavsky