Rationality - bounded ratioality
4 important questions on Rationality - bounded ratioality
Actual behavior of human agents can divert from rational behavior for 4 reaons:
- the valuations of people are incommensurable
- hierachy in values
- no rational belief
Law of small numbers
Hypothesis-based filtering of information
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Defenses of unbound rationality
-learning --> act as if unboundedly rational
- self-selection --> agents wo do not optimize, will not survive
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