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Correct. Rationality is Bounded. That fact won a Nobel Prize - https://en.wikipedia.org/wiki/Herbert_A._Simon https://en.wikipedia.org/wiki/Herbert_A._Simon Th

by yann2 5y ago

Correct. Rationality is Bounded. That fact won a Nobel Prize - https://en.wikipedia.org/wiki/Herbert_A._Simon https://en.wikipedia.org/wiki/Herbert_A._Simon The recommendation of the theory is if you cant be rational about a specific problem pick another problem, preferably a simpler problem. Unfortunately lots of chimps in the troupe are incapable of doing that and therefore we shall always have drama.

WastingMyTime89 5y ago
> Correct. Rationality is Bounded. That fact won a Nobel Prize. It's a model not a fact. As a model, it can't really be correct only more or less accurate.
- abc_lisper 5y ago
  any model better than naive intuition is better imo
- loopz 5y ago
  It's a fact many people believe themselves rational and use models expecting rational actors. Proof lacks that it actually works that way. The opposite is often most probable since you rarely have perfect knowledge in practice. Exceptions can be games like tic-tac-toe and chess.
  - WastingMyTime89 5y ago
    > Proof lacks that it actually works that way I mean everyone know it doesn't really work that way. The actual question is: does viewing the average actor as trying to perfectly optimise their utility function using all the information available constitute a good estimation of how actors work in aggregate and does it yield accurate and interesting predictions? The real insight of Simon in Models of Man is not that actors are not in fact perfectly rational. It's that you can actually model the limits of actors while keeping a fairly rigorous and manageable formalization.
    - loopz 5y ago
      Sure, but such models are hackable / breakable, just by breaking the rules or reinventing the game.
    - techbio 5y ago
      I'll have to read Simon, but I'll be looking for some stable types of responses to uncertainty, not rational but adaptive: reversion to past/training, confusion, overreaction, etc. ie something prevalent enough that it can be reasoned about.
- zepto 5y ago
  > It's a model not a fact. As a model, it can't really be correct only more or less accurate. This is not true. Models of an external world may be only more or less accurate, but models of other models may be true or false. Mathematical proofs rely on this. Rationality itself is a model so models of rationality may be true or false.
  - WastingMyTime89 5y ago
    Unless you have very peculiar and idiosyncratic definition of the world model, I am fairly confident that what you are saying doesn't make much sense. In economy in a way that is not dissimilar to physics, model has a precise meaning. To quote Wikipedia, it is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior. You can't have a model of a model. That just doesn't really make sense. > Mathematical proofs rely on this I'm confused by what you want to say here. Mathematical proofs don't use models. Every proved statements in mathematics can be built from axioms which are presupposed true applying logical rules which are themselves part of the axiomatic system. Saying that something is mathematically proved basically means that given this set of rules we can build up to that point. > Rationality itself is a model Once again I'm fairly lost by what you are trying to mean. I'm fairly certain that for most accepted meaning of the world model and the world rationality, rationality is in fact not a model in the same way that a dog is not a theory.
    - zepto 5y ago
      > Once again I'm fairly lost by what you are trying to mean. You may want to look up the difference between formal models and informal models. Since both rationality and the paper showing that it is bounded are based on formal models, it is reasonable to assume this is what we are talking about.
      - WastingMyTime89 5y ago
        Sorry, I don't understand your argument. Are you actually talking about rational choice theory? > Since both rationality and the paper showing that it is bounded are based on formal models There is no paper showing that "rationality" is bounded. Models use to consider actors making purely rational choices in the sense that they are always optimizing their utility functions using all available information. Bounded rationility is a different way of modeling actors choice function. It's just a different model. There is no model of models. Still I don't see what any of that has to do with the difference between formal and informal models. Informal model is a term I have never heard used outside of policy discussion. It's basically dress up for "because the expert said so".
vendiddy 5y ago
Could someone explain in laymen terms what "bounded" rationality means?
- glial 5y ago
  Rationality can be re-phrased as coming up with the optimal solution to a problem. If you only have finite compute/memory/time, your solution is 'bounded' by those constraints - i.e. your job is now find the best solution possible given the constraints.
btilly 5y ago
That Nobel was won in 1978, and is based on the fact that in practice we can't be rational. The NP demonstrations that, in theory, updating a Bayesian is a computationally infeasible problem was G. F. Cooper in 1990 (for Bayesian Networks). The stronger result that approximating the update is also computationally infeasible was Dagum, P. & Luby, M., 1993. So Simon's work relates to what I said, but isn't based on it.
ggm 5y ago
I've made it a life rule to try to avoid conversations with people who use "correct" to respond to statements, unless they are in the role of a teacher. Tell me, are you aware of the myriad of alternate words to express your agreement with somebody else aside from correct? You aren't here as judge of the right or wrong. Semantically, philosophically, you're expressing agreement not correctness. Or .. am I incorrect...?
carrolldunham 5y ago
* A Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, commonly but falsely referred to as the Nobel Prize in Economics

by yann2 5y ago

WastingMyTime89 5y ago

> Correct. Rationality is Bounded. That fact won a Nobel Prize. It's a model not a fact. As a model, it can't really be correct only more or less accurate.

abc_lisper 5y ago
any model better than naive intuition is better imo
loopz 5y ago
It's a fact many people believe themselves rational and use models expecting rational actors. Proof lacks that it actually works that way. The opposite is often most probable since you rarely have perfect knowledge in practice. Exceptions can be games like tic-tac-toe and chess.
- WastingMyTime89 5y ago
  > Proof lacks that it actually works that way I mean everyone know it doesn't really work that way. The actual question is: does viewing the average actor as trying to perfectly optimise their utility function using all the information available constitute a good estimation of how actors work in aggregate and does it yield accurate and interesting predictions? The real insight of Simon in Models of Man is not that actors are not in fact perfectly rational. It's that you can actually model the limits of actors while keeping a fairly rigorous and manageable formalization.
  - loopz 5y ago
    Sure, but such models are hackable / breakable, just by breaking the rules or reinventing the game.
  - techbio 5y ago
    I'll have to read Simon, but I'll be looking for some stable types of responses to uncertainty, not rational but adaptive: reversion to past/training, confusion, overreaction, etc. ie something prevalent enough that it can be reasoned about.
zepto 5y ago
> It's a model not a fact. As a model, it can't really be correct only more or less accurate. This is not true. Models of an external world may be only more or less accurate, but models of other models may be true or false. Mathematical proofs rely on this. Rationality itself is a model so models of rationality may be true or false.
- WastingMyTime89 5y ago
  Unless you have very peculiar and idiosyncratic definition of the world model, I am fairly confident that what you are saying doesn't make much sense. In economy in a way that is not dissimilar to physics, model has a precise meaning. To quote Wikipedia, it is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior. You can't have a model of a model. That just doesn't really make sense. > Mathematical proofs rely on this I'm confused by what you want to say here. Mathematical proofs don't use models. Every proved statements in mathematics can be built from axioms which are presupposed true applying logical rules which are themselves part of the axiomatic system. Saying that something is mathematically proved basically means that given this set of rules we can build up to that point. > Rationality itself is a model Once again I'm fairly lost by what you are trying to mean. I'm fairly certain that for most accepted meaning of the world model and the world rationality, rationality is in fact not a model in the same way that a dog is not a theory.
  - zepto 5y ago
    > Once again I'm fairly lost by what you are trying to mean. You may want to look up the difference between formal models and informal models. Since both rationality and the paper showing that it is bounded are based on formal models, it is reasonable to assume this is what we are talking about.
    - WastingMyTime89 5y ago
      Sorry, I don't understand your argument. Are you actually talking about rational choice theory? > Since both rationality and the paper showing that it is bounded are based on formal models There is no paper showing that "rationality" is bounded. Models use to consider actors making purely rational choices in the sense that they are always optimizing their utility functions using all available information. Bounded rationility is a different way of modeling actors choice function. It's just a different model. There is no model of models. Still I don't see what any of that has to do with the difference between formal and informal models. Informal model is a term I have never heard used outside of policy discussion. It's basically dress up for "because the expert said so".

vendiddy 5y ago

Could someone explain in laymen terms what "bounded" rationality means?

glial 5y ago
Rationality can be re-phrased as coming up with the optimal solution to a problem. If you only have finite compute/memory/time, your solution is 'bounded' by those constraints - i.e. your job is now find the best solution possible given the constraints.

btilly 5y ago

That Nobel was won in 1978, and is based on the fact that in practice we can't be rational. The NP demonstrations that, in theory, updating a Bayesian is a computationally infeasible problem was G. F. Cooper in 1990 (for Bayesian Networks). The stronger result that approximating the update is also computationally infeasible was Dagum, P. & Luby, M., 1993. So Simon's work relates to what I said, but isn't based on it.

ggm 5y ago

I've made it a life rule to try to avoid conversations with people who use "correct" to respond to statements, unless they are in the role of a teacher. Tell me, are you aware of the myriad of alternate words to express your agreement with somebody else aside from correct? You aren't here as judge of the right or wrong. Semantically, philosophically, you're expressing agreement not correctness. Or .. am I incorrect...?

carrolldunham 5y ago

* A Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, commonly but falsely referred to as the Nobel Prize in Economics