The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality?

Abstract Why would decision makers (DMs) adopt heuristics, priors, or in short “habits” that prevent them from optimally using pertinent information—even when such information is freely-available? One answer, Herbert Simon’s “procedural rationality” regards the question invalid: DMs do not, and fact cannot, process an optimal fashion. For Simon, habits are primitives, where humans ready to replace only they no longer sustain a pregiven “satisficing” goal. An alternative Daniel Kahneman’s “mental economy” valid: make decisions based on optimization. Kahneman understands optimization not differently standard economist’s “bounded rationality.” This might surprise some researchers given early Kahneman, along with Tversky, have uncovered biases appear suggest choices depart greatly rational choices. However, once we consider cognitive cost as part of constraints, turn out be occasional failures otherwise average. They save us case-by-case deliberation. While bounded rationality situates him neoclassical economics camp, procedural echoes Bourdieu’s “habitus” camp. To abridge fault line two camps, this paper proposes “two problem areas hypothesis.” Along satisfy wellbeing, what calls “substantive satisfaction.” Bourdieu belonging, love, bonding one’s environment, “transcendental