Bounded Evaluation: Cognition, Incoherence, and Regulatory Policy

Bounded Evaluation: Cognition, Incoherence, and Regulatory Policy

Bounded Rationality and Directed Cognition

This paper proposes a psychological bounded rationality algorithm that uses partially myopic option value calculations to allocate scarce cognitive resources. The model can be operationalized even when decision problems require an arbitrarily large number of state variables. We evaluate the model using experimental data on a class of complex one-person games with full information. The model exp...

The New Aid Paradigm: A Case of Policy Incoherence

From around 2000 onwards, donors and recipient governments embarked upon a new aid paradigm. The most important elements include increased selectivity in the aid allocation, more ownership of recipient countries based on nationally elaborated Poverty Reduction Strategy Papers (PRSPs), and more donor alignment and harmonization via programme-based approaches such as budget support. The paper ass...

Bounded Reasoning: Rationality or Cognition∗

Bounded reasoning about rationality can have important implications for behavior. These bounds are typically viewed as an artifact of limits in the ability to engage in interactive reasoning, i.e., to reason through “I think, you think, I think, etc ...” However, in principle, these bounds need not be determined by limits in ability. This paper develops a novel identification strategy to show t...

Bounded Cognition and Representativeness in Forecasting

Most operations models assume that individuals have perfect beliefs about random variables or stochastic processes. In reality, however, individuals make judgment errors and are subject to predictable biases. We leverage two fundamental psychological principles bounded cognition and representativeness to model individuals' forecasting errors and biases in a way that is portable to operations mo...