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Bounded-Rationality Models: Tasks to Become Intellectually Competitive

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  • Ronald M. Harstad
  • Reinhard Selten

Abstract

Research in experimental economics has cogently challenged the fundamental precept of neoclassical economics that economic agents optimize. The last two decades have seen elaboration of boundedly rational models that try to move away from the optimization approach, in ways consistent with experimental findings. Nonetheless, the collection of alternative models has made little headway supplanting the dominant paradigm. We delineate key ways in which neoclassical microeconomics holds continuing and compelling advantages over bounded-rationality models, and suggest, via a few examples, the sorts of further, difficult pushes that would be needed to redress this state of affairs. Closer collaboration between theoretic modeling and experiments is clearly seen to be necessary.

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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 51 (2013)
Issue (Month): 2 (June)
Pages: 496-511

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Handle: RePEc:aea:jeclit:v:51:y:2013:i:2:p:496-511

Note: DOI: 10.1257/jel.51.2.496
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Cited by:
  1. V. P. Crawford., 2014. "Boundedly Rational versus Optimization-Based Models of Strategic Thinking and Learning in Games," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
  2. Guido Baldi, 2014. "Endogenous preference formation on macroeconomic issues: the role of individuality and social conformity," Mind and Society: Cognitive Studies in Economics and Social Sciences, Fondazione Rosselli, vol. 13(1), pages 49-58, June.

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