11/14/2011

Modeling Bounded Rationality Review

Modeling Bounded Rationality
Average Reviews:

(More customer reviews)
Very well written in terms of technical coverage and originality of modelling bounded rationality and its application to game theory. However, the author develops most of his theories from either assumption and speculation or no justification at all in terms of formally depicting human rationality. It would have been a much more powerful book if there was a greater coverage of empirical evidence and bridging between psychology, artificial intelligence and economics. This lop-sided approach of modelling using solely game theoretic terminology and concepts ambiguous in their relevancy to simulating human thought and behaviour. However, there are some chapters, such as the one on knowledge representation and the other on limited memory that are the exception to this. Overall though, the book is still quite innovative and worth a read.

Click Here to see more reviews about: Modeling Bounded Rationality

The notion of bounded rationality was initiated in the 1950s by HerbertSimon; only recently has it influenced mainstream economics. In this book, ArielRubinstein defines models of bounded rationality as those in which elements of theprocess of choice are explicitly embedded. The book focuses on the challenges ofmodeling bounded rationality, rather than on substantial economic implications.Inthe first part of the book, the author considers the modeling of choice. Afterdiscussing some psychological findings, he proceeds to the modeling of proceduralrationality, knowledge, memory, the choice of what to know, and group decisions.Inthe second part, he discusses the fundamental difficulties of modeling boundedrationality in games. He begins with the modeling of a game with procedural rationalplayers and then surveys repeated games with complexity considerations. He ends witha discussion of computability constraints in games. The final chapter includes acritique by Herbert Simon of the author's methodology and the author's response.TheZeuthen Lecture Book series is sponsored by the Institute of Economics at theUniversity of Copenhagen.

Buy Now

Click here for more information about Modeling Bounded Rationality

No comments:

Post a Comment