SFB 303 Discussion Paper No. B - 172
Author: Selten, Reinhard
Title: Some Remarks on Bounded Rationality
Abstract: This paper cannot claim to offer an exhaustive treatment of the subject matter. Only some aspects of
bounded rationality are discussed. The first section tries to sketch the historical development of the concept
including some of the misdirected approaches to the problem. It is emphasized again and again, maybe to the
extent of boring the reader, that the development of a theory of bounded rationality needs an empirical basis
which mainly can be found in experimental research. It seems to be important to point out that the limits of
rationality are not only cognitive, but also motivational. This is done in section 2. It is argued that human
decisions are not based on reasoning alone. More primitive processes like routine learning are indispensable.
Nevertheless it is important to understand the cognitive aspects of decision processes. Sections 3 and 4 are
devoted mainly to this subject matter. We do not yet have a clear image of what bounded rationality is, but we
know what it is not: Bounded rationality is not just another kind of utility maximization or something close to it.
Keywords: Limits of rationality, Casuistic structure, Strategy constructions
JEL-Classification-Number:
Creation-Date: November 1990
Unfortunately this paper is not available online. Please contact us to order a hardcopy.
SFB 303 Homepage
26.10.1999, Webmaster