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An Algorithm for the Simulation of Bounded Rational Agents

Schuster, Stephan (2009): An Algorithm for the Simulation of Bounded Rational Agents.

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Abstract

Non-classical models of economic behaviour, usually summarised under the notion of 'Bounded Rationality' criticise the assumptions of the standard economic model - hyperrationality, perfect and costless information, and unlimited mental processing capabilities. However, alternative approaches have either remained very simple or purely descriptive. Here, a computational approach is presented based on Simon's concept of bounded rationality and satisficing as a compromise between the oversimplification of analytical and the descriptiveness of rich cognitive models.

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