Complexity, Bounded Rationality, and Heuristic Search
W. Bentley MacLeod
Columbia University - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)
March 1999
Abstract:
This paper explores the use of heuristic search algorithms for modeling human decision making. It is shown that this algorithm is consistent with many observed behavioral regularities, and may help explain deviations from rational choice. The main insight is that the heuristic function can be viewed as formal implementation of one aspect of emotion as discussed in {Descarte's Error} by Antonio Damasio. Consistent with Damasio's observations, it is shown that the quality of decision making is very sensitive to the nature of the heuristic ("emotion"), and hence this may help us better understand the role of emotion in rational choice theory.
Number of Pages in PDF File: 51
JEL Classification: D83
working papers series
Suggested Citation
MacLeod, W. Bentley, Complexity, Bounded Rationality, and Heuristic Search (March 1999). Available at SSRN: http://ssrn.com/abstract=170989 or http://dx.doi.org/10.2139/ssrn.170989
