Games and decisions with bounded rationality: theory and economic implications (2012–2014)
Bounded rationality is now a commonplace notion amongst the economic/game theory community. It dates back at least to Herbert Simon (1957) who took issue with the assumptions about the knowledge and computational ability of the rational agent championed by economic theorists. Recent work the researchers on this project has focused attention on developing models of boundedly rational individuals who have limited information about and understanding of their environment. This project will further develop these models to capture, more adequately, the various ways individuals learn and adapt to the complexities of their social interactions. The project stands to have vast implications for the future of both economic theory and game theory.