Sublime

As a new point of view we turn to bounded rationality, a departure from the mainstream tradition. We no longer can assume that every agent is a perfect calculator. This point of view is given a great deal of emphasis by Herbert Simon. Simon argued that people do not maximize. When they’re forecasting the future, they do not perform the task of

It was built around two interrelated ideas that have been at the core of my whole intellectual activity: (1) human beings are able to achieve only a very bounded rationality, and (2) as one consequence of their cognitive limitations, they are prone to identify with subgoals.

Herbert Simon calls bounded rationality.10 Bounded rationality means that people make quite reasonable decisions based on the information they have.

Simon argued that when we are confronted with a hard problem, the cognitive limitations of the mind make rationality moot. In his view, we seek ‘good enough’ choices rather than optimal ones. He called this bounded rationality.

most of the time systems end up dumber than the people in them due to multiple layers of terrible incentives,

that people—or, if you like, automata, algorithms—can and do act in situations that are not well defined.

Simon argued that when we are confronted with a hard problem, the cognitive limitations of the mind make rationality moot. In his view, we seek ‘good enough’ choices rather than optimal ones. He called this bounded rationality.

(Herbert Simon said it best: “A wealth of information creates a poverty of attention.”)