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Behind and beyond a shared definition of ecological rationality: A functional view of heuristics

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  • Mousavi, Shabnam
  • Kheirandish, Reza

Abstract

Observing human behavior in laboratories reveals time and again the undeniable influence of social components, even in the isolation of carefully designed experiments. Clearly, social and cultural constructs shape human cognition. The study of ecological rationality recognizes the importance of specifying these and other characteristics of the environment as a basis of cognition. In this paper, we compare the views of Vernon Smith and Gerd Gigerenzer, the founders of two leading research programs on ecological rationality, one in economics and one in psychology. Based on their written work and on interviews conducted by one of the authors, this article brings together for the first time the essence and principles of the study of ecological rationality in these two traditions. This conjoint presentation poses important questions and clarifies methodological challenges in the understanding of actual human behavior from experimental data. Smith sees ecological and constructivist rationality as two complementing versions of economic rationality, while Gigerenzer regards the study of fast-and-frugal heuristics as the appropriate scientific method for exploring real-world rationality. Drawing a connection between forms of rationality and emergence of experimental knowledge, we note that a theory of behavior cannot be deducted from observations alone. Establishing a theoretical framework for observed behavior starts with a search for norms that are sensitive to the context and content of the situation in which a choice is made. Studying the ecological rationality of heuristics, markets, and institutions reveals such norms.

Suggested Citation

  • Mousavi, Shabnam & Kheirandish, Reza, 2014. "Behind and beyond a shared definition of ecological rationality: A functional view of heuristics," Journal of Business Research, Elsevier, vol. 67(8), pages 1780-1785.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:8:p:1780-1785
    DOI: 10.1016/j.jbusres.2014.03.004
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    References listed on IDEAS

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    1. Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 603-610, January.
    2. Smith,Vernon L., 2009. "Rationality in Economics," Cambridge Books, Cambridge University Press, number 9780521133388.
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    Cited by:

    1. Nathan Berg & Yuki Watanabe, 2020. "Conservation of behavioral diversity: on nudging, paternalism-induced monoculture, and the social value of heterogeneous beliefs and behavior," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 19(1), pages 103-120, June.
    2. Carla Susana A. Assuad, 2020. "Understanding Rationality in Sustainable Development Decision-Making: Unfolding the Motivations for Action," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 1086-1119, September.
    3. Hallberg, Niklas L., 2017. "The micro-foundations of pricing strategy in industrial markets: A case study in the European packaging industry," Journal of Business Research, Elsevier, vol. 76(C), pages 179-188.
    4. Shabnam Mousavi & Gerd Gigerenzer, 2017. "Heuristics are Tools for Uncertainty," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 34(4), pages 361-379, December.
    5. Loock, Moritz & Hinnen, Gieri, 2015. "Heuristics in organizations: A review and a research agenda," Journal of Business Research, Elsevier, vol. 68(9), pages 2027-2036.
    6. Sebastian Kruse & David Bendig & Malte Brettel, 2023. "How Does CEO Decision Style Influence Firm Performance? The Mediating Role of Speed and Innovativeness in New Product Development," Journal of Management Studies, Wiley Blackwell, vol. 60(5), pages 1205-1235, July.

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