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Published in:
Introduction to Man and Machines Read chapter Read first chapter

2017 | OriginalPaper | Chapter

4. Bounded Rationality

Authors : Tshilidzi Marwala, Evan Hurwitz

Published in: Artificial Intelligence and Economic Theory: Skynet in the Market

Publisher: Springer International Publishing

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Abstract

Rational decision making involves using information which is almost always imperfect and incomplete, together with some intelligent machine, which if it is a human being is inconsistent in making a decision that maximizes utility. Since the world is not perfect and decisions are made irrespective of the fact that the information to be used is incomplete and imperfect, these decisions are rationally limited (bounded). Recent advances in artificial intelligence and the continual improvement of computer processing power due to Moore’s law have implications for the theory of bounded rationality. These advances expand the bounds within which a rational decision making process is exercised and, thereby, increases the probability of making rational decisions.

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previous chapter Rational Choice and Rational Expectations
next chapter Behavioral Economics
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Metadata
Title
Bounded Rationality
Authors
Tshilidzi Marwala
Evan Hurwitz
Copyright Year
2017
Book
Artificial Intelligence and Economic Theory: Skynet in the Market

Print ISBN: 978-3-319-66103-2

Electronic ISBN: 978-3-319-66104-9

Copyright Year: 2017

DOI
https://doi.org/10.1007/978-3-319-66104-9_4

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