Book•
Models of bounded rationality
01 Jan 1982-
TL;DR: In this paper, the authors discuss the structure of complex systems: Causal ordering - causality in economic models causal ordering, comparative statics, and near decomposability, causality and model abstraction, simulating large systems - simulation of large-scale systems by aggregation prediction and prescription in systems modelling.
Abstract: Part 1 The structure of complex systems: Causal ordering - causality in economic models causal ordering, comparative statics, and near decomposability, ( with Y Iwasaki) causality and model abstraction, (with Y Iwasaki) simulating large systems - simulation of large-scale systems by aggregation prediction and prescription in systems modelling Part 2 The advance of information technology: the rural-urban population balance again the impact of electronic communications on organizations the steam engine and the computer - what makes technology revolutionary managing in an information-rich world on the alienation of workers and management Part 3 Motivation and the theory of the firm: a mechanism for social selection and successful altruism organizations and markets altruism and economics - a summary statement altruism and economics - social implications Part 4 Behaviourial economics and bounded rationality: behaviourial economics - preface to "Handbook of behaviourial economics" behaviourial economics bounded rationality satisfying empirical methods in economics - behaviourial research - theory and public policy methodological foundations of economics preface to "La theorie moderne de l'enterprise - l'approche institutionelle initial and boundary conditions in economic theory - on the behaviourial and rational foundations of economic dynamics rationality in psychology and economics the state of economic science - the failure of armchair economics why economists disagree the state of economic science economic reasoning in words and pictures - effect of mode of data presentation on reasoning about economic markets (with HJM Tabachneck)
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01 Dec 1996TL;DR: Clark as mentioned in this paper argues that the mental has been treated as a realm that is distinct from the body and the world, and argues that a key to understanding brains is to see them as controllers of embodied activity.
Abstract: From the Publisher:
The old opposition of matter versus mind stubbornly persists in the way we study mind and brain. In treating cognition as problem solving, Andy Clark suggests, we may often abstract too far from the very body and world in which our brains evolved to guide us. Whereas the mental has been treated as a realm that is distinct from the body and the world, Clark forcefully attests that a key to understanding brains is to see them as controllers of embodied activity. From this paradigm shift he advances the construction of a cognitive science of the embodied mind.
3,745 citations
Book•
01 Jul 2002TL;DR: In this article, a review is presented of the book "Heuristics and Biases: The Psychology of Intuitive Judgment, edited by Thomas Gilovich, Dale Griffin, and Daniel Kahneman".
Abstract: A review is presented of the book “Heuristics and Biases: The Psychology of Intuitive Judgment,” edited by Thomas Gilovich, Dale Griffin, and Daniel Kahneman.
3,642 citations
TL;DR: The conjunction rule as mentioned in this paper states that the probability of a conjunction cannot exceed the probabilities of its constituents, P (A) and P (B), because the extension (or the possibility set) of the conjunction is included in the extension of their constituents.
Abstract: Perhaps the simplest and the most basic qualitative law of probability is the conjunction rule: The probability of a conjunction, P (A&B) cannot exceed the probabilities of its constituents, P (A) and P (B), because the extension (or the possibility set) of the conjunction is included in the extension of its constituents. Judgments under uncertainty, however, are often mediated by intuitive heuristics that are not bound by the conjunction rule. A conjunction can be more representative than one of its constituents, and instances of a specific category can be easier to imagine or to retrieve than instances of a more inclusive category. The representativeness and availability heuristics therefore can make a conjunction appear more probable than one of its constituents. This phenomenon is demonstrated in a variety of contexts including estimation of word frequency, personality judgment, medical prognosis, decision under risk, suspicion of criminal acts, and political forecasting. Systematic violations of the conjunction rule are observed in judgments of lay people and of experts in both between-subjects and within-subjects comparisons. Alternative interpretations of the conjunction fallacy are discussed and attempts to combat it are explored.
3,221 citations
TL;DR: The authors have proposed a family of algorithms based on a simple psychological mechanism: one-reason decision making, and found that these fast and frugal algorithms violate fundamental tenets of classical rationality: they neither look up nor integrate all information.
Abstract: Humans and animals make inferences about the world under limited time and knowledge. In contrast, many models of rational inference treat the mind as a Laplacean Demon, equipped with unlimited time, knowledge, and computational might. Following H. Simon's notion of satisficing, the authors have proposed a family of algorithms based on a simple psychological mechanism: onereason decision making. These fast and frugal algorithms violate fundamental tenets of classical rationality: They neither look up nor integrate all information. By computer simulation, the authors held a competition between the satisficing "Take The Best" algorithm and various "rational" inference procedures (e.g., multiple regression). The Take The Best algorithm matched or outperformed all competitors in inferential speed and accuracy. This result is an existence proof that cognitive mechanisms capable of successful performance in the real world do not need to satisfy the classical norms of rational inference.
3,112 citations
TL;DR: In this paper, the authors examined the implica- tions of individual differences in performance for each of the four explanations of the normative/descriptive gap, including performance errors, computational limitations, the wrong norm being applied by the experi- menter, and a different construal of the task by the subject.
Abstract: Much research in the last two decades has demon- strated that human responses deviate from the performance deemed normative according to various models of decision mak- ing and rational judgment (e.g., the basic axioms of utility theory). This gap between the normative and the descriptive can be inter- preted as indicating systematic irrationalities in human cognition. However, four alternative interpretations preserve the assumption that human behavior and cognition is largely rational. These posit that the gap is due to (1) performance errors, (2) computational limitations, (3) the wrong norm being applied by the experi- menter, and (4) a different construal of the task by the subject. In the debates about the viability of these alternative explanations, attention has been focused too narrowly on the modal response. In a series of experiments involving most of the classic tasks in the heuristics and biases literature, we have examined the implica- tions of individual differences in performance for each of the four explanations of the normative/descriptive gap. Performance er- rors are a minor factor in the gap; computational limitations un- derlie non-normative responding on several tasks, particularly those that involve some type of cognitive decontextualization. Un- expected patterns of covariance can suggest when the wrong norm is being applied to a task or when an alternative construal of the task should be considered appropriate.
3,068 citations