bounded rationality

(redirected from Hyperrationality)
Also found in: Encyclopedia.

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 periodicals archive ?
While it is reasonable to conclude that a satire of hyperrationality already implicitly targets the authority of scientific discourse in society at large, this article also addresses authority's prejudicial influence on the establishment of scientific legitimacy within research communities.
poem combats hyperrationality by implying that a lack of comprehension
The hyperrationality assumption means that individuals with Social Security accounts or who own shares in businesses take fully into account the saving carried out in their name when they make their decisions about how much of their personal income they will save.
In the view of the three thinkers under discussion, human beings are not repositories of hyperrationality.
First, as I have been at some pain to emphasize, one should avoid the postulate of hyperrationality.
The ostensible hyperrationality of bond traders, for instance, relies on a set of cognitive biases to edit continuous information flows from electronic, print, and interpersonal sources (pp.
Rejecting the hyperrationality assumption of individuals preferred by many economists, Williamson draws on the work of March and Simon (1958) in adopting a bounded rationality view of human decision-making processes.
Indeed, it was the scientific hyperrationality of someone like Szilard that Roald Hoffman had in mind when he wrote "Why Scientists Shouldn't Run the World" (Issues, Winter 1990-91).
Sass explores the hyperrationality of modern philosophical and artistic self-reflexiveness in its affinities with schizophrenia (disavowing any attempt at influence or causality).
In light of a more empirical world view, we now regard sight, not as the Elizabethans did--as the most nearly angelic sense in the hierarchy of senses--but as the hyperrationality of the hyperpredator.
Taking the Cappadocian trinitarian theology as a benchmark we can measure subsequent Eastern and Western theological developments, their alleged irrationality and hyperrationality.
The fact that Young is able to recover rational equilibria from such limited actors is reassuring and perhaps ironically justifies the mainstream tradition assuming hyperrationality.