Complexity, Bounded Rationality, and Heuristic Search

51 Pages Posted: 12 Aug 1999

See all articles by W. Bentley MacLeod

W. Bentley MacLeod

Columbia University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 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.

JEL Classification: D83

Suggested Citation

MacLeod, William Bentley, Complexity, Bounded Rationality, and Heuristic Search (March 1999). Available at SSRN: https://ssrn.com/abstract=170989 or http://dx.doi.org/10.2139/ssrn.170989

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