Bounded rationality

Bounded rationality

About This Video

Herbert Simon's concept of 'bounded rationality' has spawned a lot of research interests in psychology and economics. Dr. Gigerenzer identifies three different interpretations of bounded rationality - two of which deal with the inability of humans to perfectly optimize solutions to problems in so-called 'small worlds' where all probabilities and outcomes are known, and one view of bounded rationality in which humans have to deal with uncertain worlds and optimization is out of reach. In Dr. Gigerenzer's mind, the latter view is central to a better understanding of real-world human decision making.
Tags:
bounded rationality, herbert simon, heuristics, uncertainty, optimization, economics, psychology
Duration:
00:06:17