Bounded-Rationality Models: Tasks to Become Intellectually Competitive
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.
Volume (Year): 51 (2013)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: https://www.aeaweb.org/journalEmail: |
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
- V. P. Crawford., 2014.
"Boundedly Rational versus Optimization-Based Models of Strategic Thinking and Learning in Games,"
N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
- Vincent P. Crawford, 2013. "Boundedly Rational versus Optimization-Based Models of Strategic Thinking and Learning in Games," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 512-27, June.
- Allen F. & Morris S. & Postlewaite A., 1993. "Finite Bubbles with Short Sale Constraints and Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 61(2), pages 206-229, December.
- Ayala Arad & Ariel Rubinstein, 2012.
"Multi-Dimensional Iterative Reasoning in Action: The Case of the Colonel Blotto Game,"
Levine's Working Paper Archive
786969000000000497, David K. Levine.
- Arad, Ayala & Rubinstein, Ariel, 2012. "Multi-dimensional iterative reasoning in action: The case of the Colonel Blotto game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 571-585.
- Gul, Faruk, 1991. "A Theory of Disappointment Aversion," Econometrica, Econometric Society, vol. 59(3), pages 667-86, May.
- Charles R. Plott & Kathryn Zeiler, 2005. "The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations," American Economic Review, American Economic Association, vol. 95(3), pages 530-545, June.
- Lei, V. & Noussair, C. & Plott, C.R., 1998.
"Non-Speculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality Vs. Actual Irrationality,"
Purdue University Economics Working Papers
1120, Purdue University, Department of Economics.
- Lei, Vivian & Noussair, Charles N & Plott, Charles R, 2001. "Nonspeculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality vs. Actual Irrationality," Econometrica, Econometric Society, vol. 69(4), pages 831-59, July.
- Reinhard Selten & Thorsten Chmura & Sebastian J. Goerg, 2011. "Stationary Concepts for Experimental 2 X 2 Games: Reply," American Economic Review, American Economic Association, vol. 101(2), pages 1041-44, April.
- David K. Levine, 1998.
"Modeling Altruism and Spitefulness in Experiment,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
- Binmore, Ken, 1988. "Modeling Rational Players: Part II," Economics and Philosophy, Cambridge University Press, vol. 4(01), pages 9-55, April.
- Debreu, Gerard, 1970.
"Economies with a Finite Set of Equilibria,"
Econometric Society, vol. 38(3), pages 387-92, May.
- Mark Armstrong & Steffen Huck, 2010.
"Behavioral Economics as Applied to Firms: A Primer,"
CESifo Working Paper Series
2937, CESifo Group Munich.
- Armstrong, Mark & Huck, Steffen, 2010. "Behavioral economics as applied to firms: a primer," MPRA Paper 20356, University Library of Munich, Germany.
- Reinhard Selten & Thorsten Chmura, 2005.
"Stationary Concepts for Experimental 2x2 Games,"
Bonn Econ Discussion Papers
bgse33_2005, University of Bonn, Germany.
- Binmore, Ken, 1987. "Modeling Rational Players: Part I," Economics and Philosophy, Cambridge University Press, vol. 3(02), pages 179-214, October.
- Tirole, Jean, 1982. "On the Possibility of Speculation under Rational Expectations," Econometrica, Econometric Society, vol. 50(5), pages 1163-81, September.
- Vernon L. Smith, 1965. "Experimental Auction Markets and the Walrasian Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 73, pages 387.
- Matthew Rabin, 2013. "Incorporating Limited Rationality into Economics," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 528-43, June.
- Dyer, Douglas & Kagel, John H & Levin, Dan, 1989.
"A Comparison of Naive and Experienced Bidders in Common Value Offer Auctions: A Laboratory Analysis,"
Royal Economic Society, vol. 99(394), pages 108-15, March.
- Dyer, D. & Kagel, J.H. & Levin, D., 1988. "A Comparison Of Naive And Experienced Bidders In Common Value Offer Auctions A Laboratory Analysis," Papers 11, Houston - Department of Economics.
- Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2013. "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 5-62, March.
- Martin Dufwenberg & Tobias Lindqvist & Evan Moore, 2005. "Bubbles and Experience: An Experiment," American Economic Review, American Economic Association, vol. 95(5), pages 1731-1737, December.
When requesting a correction, please mention this item's handle: RePEc:aea:jeclit:v:51:y:2013:i:2:p:496-511. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.