bounded rationality

(redirected from Hyperrational)
Also found in: Dictionary, Encyclopedia, Wikipedia.

Bounded Rationality

The theory that humans attempt to make rational decisions, but their ability to do so is limited by knowledge, ability to know, inadequate time to consider and other factors. Bounded rationality may explain situations like panic buying, in which investors continue to buy a security long after it ceases to be rational to do so. Investors may believe the price for the security may continue to rise and may not believe they have enough time to find out for certain. Bounded rationality claims people aim for rationality but cannot be reasonable all the time. See also: Behavioral economics.

bounded rationality

limits on the capabilities of people to deal with complexity, process information and pursue rational aims. Bounded rationality prevents parties to a CONTRACT from contemplating or enumerating every contingency that might arise during a TRANSACTION, so preventing them from writing complete contracts.
References in classic literature ?
You feel your way with the speed of light, by some hyperrational process, to truth.
If this sort of criticism has its limitations--it is necessarily inexact, deeply subjective, and as much about the critic as the poet--then it likewise lays bare the shortcomings of its Amoldian counterpart, which appears desiccated and hyperrational by comparison.
Selten 1990), Williamson (2010, 219) concludes that stakeholders "are neither hyperrational nor irrational but are attempting effectively to cope with complex contracts that are incomplete.
As they did so, the fundamental focus of study shifted from understanding how imperfect people coordinate their actions with others to an exercise in modeling representative automatons as hyperrational, maximizing agents.
Probably inspired by films like To Catch a Thief (1955), the repressed, frustrated, hyperrational Betty Ann, after the failure of her dreary affair with Magruder, directs her new fantasy towards the mysterious and fascinating jewel thief, who embodies an escape from the social repression she represents, a repression with which, like any romantic comedy character, she is unconsciously unsatisfied.
104) Posner himself could therefore rightly argue that some of the insights that are ascribed to behavioural economics are already a part of economic analysis of law 'which long ago abandoned the model of hyperrational, emotionless, unsocial, supremely egoistic, non-strategic man or woman' that some appear to ascribe to it.
The third important departure from the hyperrational model comes from the way workers perceive inflation.
As commonly practiced, medical ethics was described as narrow and deductivist: not just bloodless and hyperrational in tone but mistaken about the power and authenticity of its objective stance.
Patients who are confused about life, or who suffer from a small crisis of the spirit, find it difficult to talk to doctors about their problems in this hyperrational environment.
Love sides with the so-called "deep" ecologists who contend that man "must break through its preoccupation with mediating between only human issues," the naive belief that all will be well if man deals only with the inter-human and hyperrational (227).
At a Yale Law School faculty workshop, I provocatively suggested that it would be immoral for anyone in the audience to purchase a car without installing Lojack, to which my colleague Jules Coleman replied that it was immoral for me to publish the paper because it might make it less likely that hyperrational consumers would take on the cost of purchasing Lojack.
The hyperrational discourse of the law school classroom and law journals is not, generally speaking, good training for populists.