Regions of Rationality: Maps for Bounded Agents
نویسندگان
چکیده
An important problem faced by boundedly rational agents is to identify “regions of rationality,” i.e., the areas for which simple, boundedly rational models are and are not effective. To map the contours of such regions, we derive probabilities that models identify the best of m alternatives (m > 2) characterized by k attributes (k > 1). The models include a single variable (lexicographic), variations of elimination-by-aspects, equal weighting, hybrids of the preceding, and models exploiting dominance. We compare all with multiple regression. We illustrate the theory with twenty simulated and four empirical datasets. Fits between predictions and realizations are excellent. However, the terrain mapped by our work is complex and no single model is “best.” We further provide an overview by regressing the performance of the different models on factors characterizing environments. We conclude with suggestions for further research as well as implications for the concept of rationality in economics.
منابع مشابه
Structural Stability and Robustness to Bounded Rationality∗
The introduction of a small amount of bounded rationality into a model sometimes has little effect, and sometimes has a dramatic impact on predicted behavior. We call a model robust to bounded rationality if small deviations from rationality result only in small changes in the equilibrium set. We also say that a model is structurally stable if the equilibrium set (given fully rational agents) v...
متن کاملBounded Rationality in the Iterated Prisoner’s Dilemma
In diverse fields such as computer science, economics and psychology, bounded rationality has emerged as an important research topic. Models which assume the existence of perfectly rational agents seem inadequate for many realworld problems where agents often lack perfect rationality. Classes of imperfect rationality include the conditions of incomplete knowledge, memory, information or computa...
متن کاملRationality, perception, and the all-seeing eye
Seeing-perception and vision-is implicitly the fundamental building block of the literature on rationality and cognition. Herbert Simon and Daniel Kahneman's arguments against the omniscience of economic agents-and the concept of bounded rationality-depend critically on a particular view of the nature of perception and vision. We propose that this framework of rationality merely replaces econom...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید
ثبت ناماگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید
ورودعنوان ژورنال:
- Decision Analysis
دوره 3 شماره
صفحات -
تاریخ انتشار 2006