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Maps of Bounded Rationality

Author

Listed:
  • Kahneman, Daniel

    (Princeton University)

Abstract

The work cited by the Nobel committee was done jointly with the late Amos Tversky (1937-1996) during a long and unusually close collaboration. Together, we explored the psychology of intuitive beliefs and choices and examined their bounded rationality. This essay presents a current perspective on the three major topics of our joint work: heuristics of judgment, risky choice, and framing effects. In all three domains we studied intuitions - thoughts and preferences that come to mind quickly and without much reflection. I review the older research and some recent developments in light of two ideas that have become central to social-cognitive psychology in the intervening decades: the notion that thoughts differ in a dimension of accessibility - some come to mind much more easily than others - and the distinction between intuitive and deliberate thought processes.

Suggested Citation

  • Kahneman, Daniel, 2002. "Maps of Bounded Rationality," Nobel Prize in Economics documents 2002-4, Nobel Prize Committee.
    • Handle: RePEc:ris:nobelp:2002_004
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    File URL: http://nobelprize.org/nobel_prizes/economics/laureates/2002/kahnemann-lecture.pdf
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    References listed on IDEAS

    as
    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. Kahneman, Daniel & Ritov, Ilana & Schkade, David A, 1999. "Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 203-235, December.
    3. Loewenstein, George, 1996. "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 272-292, March.
    4. Gilovich,Thomas & Griffin,Dale & Kahneman,Daniel (ed.), 2002. "Heuristics and Biases," Cambridge Books, Cambridge University Press, number 9780521796798.
    5. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    6. Kahneman,Daniel & Slovic,Paul & Tversky,Amos (ed.), 1982. "Judgment under Uncertainty," Cambridge Books, Cambridge University Press, number 9780521284141.
    7. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    8. Raymond J. Kopp, 1992. "Why existence value should be used in cost-benefit analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(1), pages 123-130.
    9. Koehler, Derek J., 1996. "A Strength Model of Probability Judgments for Tournaments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 16-21, April.
    10. Kahneman, Daniel & Schkade, David & Sunstein, Cass R, 1998. "Shared Outrage and Erratic Awards: The Psychology of Punitive Damages," Journal of Risk and Uncertainty, Springer, vol. 16(1), pages 49-86, April.
    11. John A. List, 2002. "Preference Reversals of a Different Kind: The "More Is Less" Phenomenon," American Economic Review, American Economic Association, vol. 92(5), pages 1636-1643, December.
    12. Kahneman, Daniel & Ritov, Ilana, 1994. "Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 5-38, July.
    13. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    14. Kahneman,Daniel & Tversky,Amos (ed.), 2000. "Choices, Values, and Frames," Cambridge Books, Cambridge University Press, number 9780521627498.
    15. Arrow, Kenneth J, 1982. "Risk Perception in Psychology and Economics," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 1-9, January.
    16. repec:feb:framed:0068 is not listed on IDEAS
    17. Gilovich,Thomas & Griffin,Dale & Kahneman,Daniel (ed.), 2002. "Heuristics and Biases," Cambridge Books, Cambridge University Press, number 9780521792608.
    18. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    behavioral economics; experimental economics;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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