From Rationality,Bounded Rationality to Modern Psychology and Economics

The paper surveys the history of economic thoughts on( bounded) rationality and the academic frontier of the concept. Firstly it presents the rational choice theory as the foundation of economics. Then the original idea of bounded rationality by Simon( 1955) is introduced. Finally, from the perspective of modern interdisciplinary fields,namely psychology and economics,the paper discusses social preference,the self-control problem,the judgment under uncertainty and the framing effect.