The notion of bounded rationality has recently gained considerable popularity in the behavioural and social sciences. This article surveys the different usages of the term, in particular the way ‘anomalous’ behavioural phenomena are elicited, how these phenomena are incorporated in model building, and what sort of new theories of behaviour have been developed to account for bounded rationality ...

In this paper three adaptive agent models incorporating triggered emotional responses are explored and evaluated on their rationality. One of the models is based on temporal discounting second on memory traces and the third one on hebbian learning with mutual inhibition. The models are assessed using a measure reflecting the environment’s behaviour and expressing the extent of rationality. Simu...

In this paper three adaptive agent models incorporating triggered emotional responses are explored and evaluated on their rationality. One of the models is based on temporal discounting second on memory traces and the third one on hebbian learning with mutual inhibition. The models are assessed using a measure reflecting the environment’s behaviour and expressing the extent of rationality. Simu...

In this paper an adaptive decision model based on predictive loops through feeling states is analysed from the perspective of rationality. Four different variations of Hebbian learning are considered for different types of connections in the decision model. To assess the extent of rationality, a measure is introduced reflecting the environment’s behaviour. Simulation results and the extents of ...

Colman’s reformulation of rational theory is challenged in two ways. Analogy-making is suggested as a possible candidate for an underlying and unifying cognitive mechanism of decision-making, one which can explain some of the paradoxes of rationality. A broader framework is proposed in which rationality is considered as an emerging property of analogy-based behavior. Rationality has long been s...

Although in everyday life and thought we take for granted that there are norms of rationality, their existence presents severe philosophical problems. Kolodny (2005) is thus moved to deny that rationality is normative. But this denial is not itself unproblematic, and I argue that Kolodny’s defense of it—particularly his Transparency Account, which aims to explain why rationality appears to be n...

The ‘Savage paradigm’ of rational decision-making under uncertainty has become the dominant model of human behavior in mainstream economics and game theory. However, under the rubric of ‘bounded-rationality’, this model has been criticized as inadequate from both normative and descriptive viewpoints. This paper sketches the historical roots and some current developments of this movement, distin...

Although in everyday life and thought we take for granted that there are norms of rationality, their existence presents severe philosophical problems. Kolodny (2005) is thus moved to deny that rationality is normative. But this denial is not itself unproblematic, and I argue that Kolodny’s defense of it—particularly his Transparency Account, which aims to explain why rationality appears to be n...

We study the strategic advantages of following rules of thumb that bundle different games together (called rule rationality) when this may be observed by one’s opponent. We present a model in which the strategic environment determines which kind of rule rationality is adopted by the players. We apply the model to characterize the induced rules and outcomes in various interesting environments. F...

This paper explores whether the power of arbitrage to induce more rational behavior in market and nonmarket settings extends to diverse decision-making tasks over preferences for gambles. We examine how arbitrage in a preference reversal setting affects behavior for the valuation of low probability food safety risks, the Allais Paradox, and the Ellsberg paradox. We design a three-stage experime...