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On the futility of criticizing Simon´s rational choice model

Author

Listed:
  • Gustavo Marqués

    (Centro de Investigación en Epistemología de las Ciencias Económicas (CIECE), Facultad de Ciencias Económicas (FCE), Universidad de Buenos Aires (UBA), Universidad Nacional de Lomas de Zamora (UNLZ).)

  • Diego Weisman

    (Centro de Investigación en Epistemología de las Ciencias Económicas (CIECE), Facultad de Ciencias Económicas (FCE), Universidad de Buenos Aires (UBA) y Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET).)

Abstract

Models of Bounded Rationality are often seen as more realistic than the traditional alternatives based on the fully-rational homo economicus, assumed by Expected Utility Theory (EUT). In his seminal paper on Bounded Rationality Simon (1955) pictured a decision maker as having computational capacities and limited information. These changes were well received by many economists who disliked the “hopelessly un-realist” flavor of based-EUT models. To put Simon (1955) in a nutshell, though real agents cannot maximize because his rationality and knowledge is bounded, they can satisfy in the sense of choosing a good (but not necessary optimal) option. This view is attractive because it is in line with commonsense and seems to be descriptively accurate, but unfortunately it lacks empirical content –or, to say the least, it certainly has less empirical content than EUT.

Suggested Citation

  • Gustavo Marqués & Diego Weisman, 2008. "On the futility of criticizing Simon´s rational choice model," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 33(26), pages 43-62, july-dece.
    • Handle: RePEc:ula:econom:v:33:y:2008:i:26:p:43-62
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    References listed on IDEAS

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    1. Simon, Herbert A, 1986. "Rationality in Psychology and Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 209-224, October.
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    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • D0 - Microeconomics - - General

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