The first consequence of the principle of bounded rationality is that the intended rationality of an actor requires him to construct a simplified model of the real situation in order to deal with it. He behaves rationally with respect to this model, and such behavior is not even approximately optimal with respect to the real world. To predict his behavior we must understand the way in which this simplified model is constructed, and its construction will certainly be related to his psychological properties as a perceiving, thinking, and learning animal.
Herbert SimonRelated topics
actor animal construct deal learning model order predict real respect simplified situation thinking way optimalRelated quotes
Neither perfect knowledge of the past nor complete awareness of the current state of the arts gives sufficient foresight to indicate profitable action. Even for this more restricted objective, the pervasive effects of uncertainty prevent the ascertainment of actions which are supposed to be optimal in achieving profits. Now the consequence of this is that modes of behavior replace optimum equilibrium conditions as guiding rules of action. Therefore, in the following sections two forms of conscious adaptive behavior are emphasized.
Armen Alchian
As you can see this is a composition of vertical and horizontal lines which will (in an abstract manner) have to express the idea of rising upwards, of magnitude. This is the same idea which used, for example, to be the guiding principle in the construction of cathedrals. Since only the manner of expression and not the representation has to express this general idea, I have not given any title. An abstract human mind will, of itself, receive the intended impression. I always confine myself to expressing the general.
Piet Mondrian
In Administrative Behavior, bounded rationality is largely characterized as a residual category - rationality is bounded when it falls short of omniscience. And the failures of omniscience are largely failures of knowing all the alternatives, uncertainty about relevant exogenous events, and inability to calculate consequences. There was needed a more positive and formal characterization of the mechanisms of choice under conditions of bounded rationality... Two concepts are central to the characterization: search and satisficing.
Herbert Simon
In principle, every social situation involves strategic interaction among the participants. Thus, one might argue that proper understanding of any social situation would require game-theoretic analysis. But in actual fact, classical economic theory did manage to sidestep the game-theoretic aspects of economic behavior by postulating perfect competition, i. e., by assuming that every buyer and every seller is very small as compared with the size of the relevant markets, so that nobody can significantly affect the existing market prices by his actions.
John Harsanyi
There is no Animal in the general singular, separated from man by a single, indivisible limit. We have to envisage the existence of "living creatures,” whose plurality cannot be assembled within the single figure of an animality that is simply opposed to humanity. ... The confusion of all nonhuman living creatures within the general and common category of the animal is not simply a sin against rigorous thinking, vigilance, lucidity, or empirical authority, it is also a crime. Not a crime against animality, precisely, but a crime of the first order against the animals, against animals.
Jacques Derrida