- Title
- Introduction to smart decision-making
- Creator
- Altman, Morris
- Relation
- Handbook of Behavioural Economics and Smart Decision-Making p. 1-8
- Publisher Link
- http://dx.doi.org/10.4337/9781782549598.00007
- Publisher
- Edward Elgar
- Resource Type
- book chapter
- Date
- 2017
- Description
- This is an original contribution of essays on behavioural economics, which builds upon the research of Herbert Simon and, more generally, the Carnegie-Mellon school of behavioural economics. This perspective can be referred to as the bounded rationality methodological approach to behavioural economics (Altman 1999, 2005, 2015, 2017). In this perspective, the prior assumption is that decision-makers are relatively rational, intelligent and smart (satisficing, boundedly rational and evolutionarily rational). As one of the intellectual leaders of the Carnegie-Mellon school, James March (1978, p. 589), stated, it is of primary importance to determine if we can explain human behaviour in terms of rationality, broadly defined, even if at first glance such behaviour does not appear rational and might even appear to be error-prone or ‘biased’. More generally, I refer to this methodological approach as smart decision-making, which encompasses bounded rationality, procedural rationality, fast and frugal heuristics, the brain as a scarce resource (following the insights of Friedrich Hayek) and the institutional, sociological and psychological-neurological determinants of decision-making. This is counter-posed to the world view of conventional or neoclassical rationality as well as the heuristics and biases perspective on behavioural economics, pioneered by Kahneman and Tversky (Kahneman 2003, 2011), that dominates contemporary behavioural economics.
- Subject
- economics; decision-makers; behavioural psychology; behavioural economics
- Identifier
- http://hdl.handle.net/1959.13/1477318
- Identifier
- uon:49964
- Identifier
- ISBN:9781782549574
- Language
- eng
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