A bounded rationality assessment of the new behavioral economics

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Abstract

I explore the evolution of behavioral economics, from a multidisciplinary rational agent or bounded rationality approach that was pioneered and championed by Herbert Simon (1959, 1978, 1987) from the 1950s, to the heuristics and biases approach that currently dominates the field. I argue that although the heuristics and biases approach pioneered by Kahneman and Tversky (1979; Kahneman, 2003, 2011; Tversky and Kahneman, 1981) has made significant contributions to the field, the bounded rationality approach holds most promise because of its focus on methodology and related causal analyses and modeling, smart decision-makers, capa- bilities, and institutional design.
Original languageEnglish
Title of host publicationRoutledge Handbook of Behavioral Economics
PublisherTaylor & Francis
Chapter14
Pages179-193
Number of pages15
ISBN (Electronic)9781315743479
ISBN (Print)9781138821149
DOIs
Publication statusPublished - 5 Aug 2016

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Altman, M. (2016). A bounded rationality assessment of the new behavioral economics. In Routledge Handbook of Behavioral Economics (pp. 179-193). Taylor & Francis. https://doi.org/10.4324/9781315743479