Graduate studies at Western
|Abstract||Decision theory seems to offer a very attractive normative framework for individual and social choice under uncertainty. The decisionmaker should think of her choice situation, at any given moment, in terms of a set of possible outcomes, that is, specifications of the possible consequences of choice, described in light of the decisionmaker's goals; a set of possible actions; and a "state set" consisting of possible prior "states of the world." It is this framework for choice which provides the foundation for expected utility theory, as demonstrated in the work of Leonard Savage. Problems arise, however, when the decisionmaker is boundedly rational: when the mental process of thinking about outcomes, actions, and states is itself expensive and time consuming. In the case of the unboundedly rational decisionmaker, decision theory enjoins her to employ maximally specific outcomes; to consider all possible actions; and to use a set of mutually exclusive and collective exhaustive states, each of which is sufficiently finely specified so that each action, together with each state, yields one and only one maximally specific outcome. In the case of the boundedly rational decisionmaker, this procedure is either infeasible or, if feasible, irrational. This paper presents the problem of bounded rationality. It surveys possible solutions, none of which are found to be attractive. And it concludes by discussing the difficulties that the problem of bounded rationality poses for the welfarist program for legal scholarship presented by Louis Kaplow and Steven Shavell in their book, Fairness versus Welfare.|
|Keywords||No keywords specified (fix it)|
|Categories||categorize this paper)|
|Through your library||Only published papers are available at libraries|
Similar books and articles
Herbert A. Simon (2000). Bounded Rationality in Social Science: Today and Tomorrow. [REVIEW] Mind and Society 1 (1):25-39.
Bruno Verbeek (2001). Consequentialism, Rationality and the Relevant Description of Outcomes. Economics and Philosophy 17 (2):181-205.
Charles F. Manski (2011). Actualist Rationality. Theory and Decision 71 (2):195-210.
John S. Wilkins (2010). Are Creationists Rational? Synthese 178 (2):207-218.
Javier Echeverría & José Francisco Álvarez (2008). Bounded Rationality in Social Sciences. Poznan Studies in the Philosophy of the Sciences and the Humanities 96 (1):173-189.
Mauro Maldonato (2007). Undecidable Decisions: Rationality Limits and Decision-Making Heuristics. World Futures 63 (1):28 – 37.
Walter Bossert (2001). Choices, Consequences, and Rationality. Synthese 129 (3):343 - 369.
Reed Richter (1984). Rationality Revisited. Australasian Journal of Philosophy 62 (4):392 – 403.
Added to index2009-01-28
Total downloads18 ( #74,653 of 739,136 )
Recent downloads (6 months)1 ( #61,778 of 739,136 )
How can I increase my downloads?