Bounded Rationality and Bounded Individuality

Document Type

Article

Language

eng

Format of Original

19 p.

Publication Date

2015

Publisher

Emerald Group Publishing Ltd.

Source Publication

Research in the History of Economic Thought and Methodology

Source ISSN

0743-4154

Abstract

This paper argues that since the utility function representation of the individual is derived from standard rationality theory, the view that rationality is bounded implies that individuality should be seen to be bounded as well. The meaning of this idea is developed in terms of two ways in which individuality is bounded, with one bound associated with bounded rationality in Kahneman and Tversky’s prospect theory and another bound associated with bounded rationality in Simon’s thinking. The two bounds on individuality are argued to be employed in agent-based modeling and social identity theory. How bounded individuality might be formally modeled is illustrated in an account of Kirman’s Marseille fish market analysis.

Comments

Research in the History of Economic Thought and Methodology, Vol. 33 (2015): 75-93. DOI.

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