Bounded-Rationality Models: Tasks to Become Intellectually Competitive
Harstad, Ronald M., and
Reinhard Selten. 2013. "Bounded-Rationality Models: Tasks to Become Intellectually Competitive."
Journal of Economic Literature,
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.
Article Full-Text Access
Harstad, Ronald M. (U MO)
Selten, Reinhard (U Bonn)
B40: Economic Methodology: General
C72: Noncooperative Games
C90: Design of Experiments: General
D01: Microeconomic Behavior: Underlying Principles
D21: Firm Behavior: Theory