Journal of Economic Literature
ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)
Bounded-Rationality Models: Tasks to Become Intellectually Competitive
Journal of Economic Literature
(pp. 496–511)
Abstract
Research in experimental economics has cogently challenged the fundamental precept of neoclassical economics that economic agents optimize. The last two decades have seen elaboration of boundedly rational models that try to move away from the optimization approach, in ways consistent with experimental findings. Nonetheless, the collection of alternative models has made little headway supplanting the dominant paradigm. We delineate key ways in which neoclassical microeconomics holds continuing and compelling advantages over bounded-rationality models, and suggest, via a few examples, the sorts of further, difficult pushes that would be needed to redress this state of affairs. Closer collaboration between theoretic modeling and experiments is clearly seen to be necessary.Citation
Harstad, Ronald M., and Reinhard Selten. 2013. "Bounded-Rationality Models: Tasks to Become Intellectually Competitive." Journal of Economic Literature 51 (2): 496–511. DOI: 10.1257/jel.51.2.496Additional Materials
JEL Classification
- B40 Economic Methodology: General
- C72 Noncooperative Games
- C90 Design of Experiments: General
- D01 Microeconomic Behavior: Underlying Principles
- D21 Firm Behavior: Theory