BOUNDED RATIONALITY
The Adaptive Toolbox
Gerd Gigerenzer and Reinhard
Selten, editors
In a complex and uncertain
world humans and animals make decisions under the constraints of limited knowledge,
resources, and time. Yet models of rational decision making in economics, cognitive
science, biology, and other fields largely ignore these real constraints and instead
assume agents with perfect information and unlimited time. About forty years ago, Herbert
Simon challenged this view with his notion of "bounded rationality." Today,
bounded rationality has become a fashionable term used for disparate views of reasoning.
This book promotes bounded
rationality as the key to understanding how real people make decisions. Using the concept
of an "adaptive toolbox," a repertoire of fast and frugal rules for decision
making under uncertainty, it attempts to impose more order and coherence on the idea of
bounded rationality. The contributors view bounded rationality neither as optimization
under constraints nor as the study of people's reasoning fallacies. The strategies in the
adaptive toolbox dispense with optimization and, for the most part, with calculations of
probabilities and utilities. The book extends the concept of bounded rationality from
cognitive tools to emotions; it analyzes social norms, imitation, and other cultural tools
as rational strategies; and it shows how smart heuristics can exploit the structure of
environments. It brings together experts from cognitive science, economics, evolutionary
biology, and anthropology to create an interdisciplinary basis for understanding the
rationality of the adaptive toolbox.
Contents
The Dahlem Konferenzen List
of Participants
Rethinking Rationality
Gerd Gigerenzer and Reinhard
Selten
What Is Bounded Rationality?
Reinhard Selten
The Adaptive Toolbox
Gerd Gigerenzer
Fast and Frugal Heuristics
for Environmentally Bounded Minds
Peter M. Todd
Evolutionary Adaptation and
the Economic Concept of Bounded Rationality - A Dialogue
Peter Hammerstein
Group Report: Is There
Evidence for an Adaptive Toolbox?
Abdolkarim Sadrieh,
Rapporteur Wemer Guth, Peter Hammerstein, Stevan Harnad, Ulrich Hoffrage, Bettina Kuon,
Bertrand R. Munier, Peter M. Todd, Massimo Warglien, and Martin Weber
The Fiction of Optimization
Gary Klein
Preferential Choice and
Adaptive Strategy Use
John W. Payne and James R.
Bettman
Comparing Fast and Frugal
Heuristics and Optimal Models
Laura Martignon
Group Report: Why and When Do
Simple Heuristics Work?
Daniel G. Goldstein,
Rapporteur
Gerd Gigerenzer, Robin M.
Hogarth, Alex Kacelnik,
Yaakov Kareev, Gary Klein,
Laura Martignon, John W. Payne,and Karl H. Schlag
Emotions and Cost-benefit
Assessment: The Role of Shame and Self-esteem in Risk Taking
Daniel M. T. Fessler
Simple Reinforcement Learning
Models and Reciprocation in the Prisoner's Dilemma Game
Ido Erev andAlvin E. Roth
Imitation, Social Learning,
and Preparedness as Mechanisms of Bounded Rationality
Kevin N. Laland
Decision Making in
Superorganisms: How Collective Wisdom Arises from the Poorly Informed Masses
Thomas D. Seeley
Group Report: Effects of
Emotions and Social Processes on Bounded Rationality
Barbara A. Ateliers,
Rapporteur Ido Erev, Daniel M.T. Fessler, Charlotte K. Hemelrijk, Ralph Hertwig, Kevin N.
Laland, Klaus R. Scherer, Thomas D. Seeley, Reinhard Selten, and Philip E. Tetlock
Norms and Bounded Rationality
Robert Boyd and Peter J.
Richerson
Prominence Theory as a Tool
to Model Boundedly Rational Decisions
WulfAlbers
Goodwill Accounting and the
Process of Exchange
Kevin A. McCabe and Vernon L.
Smith
376 pages