RATIONAL THOUGHT AND RATIONAL BEHAVIOR: A REVIEW OF BOUNDED RATIONALITY: THE ADAPTIVE TOOLBOX

Standard economic theory says that the rational approach to a decision is to weigh all alternatives on all relevant dimensions and then to select the one with the highest weight. Such a procedure would maximize subjective expected utility. But, because of constraints on time and available information, people and other animals often bypass this process by using “fast and frugal” heuristics to make decisions. Rationality is thus said to be “bounded” by time and information constraints. The articles in this book describe and organize common heuristics. They show that use of such heuristics is generally the best approach to many real world problems and therefore not irrational. Heuristics evolved, they say, not as deviations from rationality but as aids to rationality in cases where the standard model would have proved to be too slow or inefficient. Although the approach of almost all of the authors of these papers is that of cognitive psychology—a focus on internal cognitive mechanisms—their findings and even their theories may be interpreted in terms of reinforcement and punishment acting on behavioral patterns.