Learning rules of thumb or learning more rational rules

Article Abstract:

The distinction between learning rules that produce significantly rational behavior in more situations and those that do not has been analyzed in an experiment. The experiment involves a task that manipulates individual choice problems to allow for simple rules that yield essentially rational behavior in one condition but not in succeeding ones. Results suggest that individuals may learn to utilize more rational rules because they can successfully transfer what they learn in one condition to another. However, individuals also learn to select their use of simple rules to arrive at more significantly rational choices.

Learning, Consumer preferences

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Rationalizing hyperbolic discounting

Article Abstract:

Agents who are uncertain about their discount rates may opt to discount the distant future in a hyperbolic rather than an exponential manner. This observation takes into consideration the fact that under certain conditions, uncertainty over hazard rates may result in non-constant discounting but not necessarily imply dynamically inconsistent behavior. For other cases, uncertainty over discount rates can lead to dynamically inconsistent behavior.

Rationalization (Psychology), Discount rates

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Emotional arousal as a source of bounded rationality

Article Abstract:

Theoretical and experimental evidence suggests that emotional arousal is a significant contributor of bounded rationality. This theory is validated by the Yerkes-Dodson law from psychology and offers an alternative psychological explanation for bounded rationality. The utility of the bounded rationality construct is illustrated with examples from press and academic publications related to management, economics and law.

Emotions

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