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Bounded Rationality, Beliefs, and Behavior

  • This chapter presents a microeconomic, behavioral perspective on bounded rationality and beliefs. It begins with an account of how research on belief biases, in particular via probabilistic belief elicitation, has become mainstream in economics only relatively recently and late, even in behavioral economics (aka “psychology and economics”). The chapter then offers a review of the decision-theoretic foundations of modeling and eliciting (subjective) beliefs as probabilities, as well as selected—both classic and recent—evidence on humans’ bounded rationality from related research in psychology and economics. In doing so, it connects the historical debates within decision theory, on the one hand, and within psychology, on the other, concerning the normative status of expected utility and Bayesianism, as well as its methodological implications. A conclusion draws lessons for the practice of belief elicitation and future research.

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Metadaten
Document Type:Working Paper
Language:English
Author(s):Sebastian Schweighofer-KodritschORCiD
Parent Title (English):Berlin School of Economics Discussion Papers
Hertie Collections (Serial Number):Berlin School of Economics Discussion Papers (37)
Publication year:2024
Publishing Institution:Hertie School
Number pages:36
Related URL:https://berlinschoolofeconomics.de/insights/discussion-papers
DOI:https://doi.org/10.48462/opus4-5363
Release Date:2024/04/18
Edition:No. 37
Hertie School Research:BerlinSchoolOfEcon_Discussion_Papers
Licence of document (German):Creative Commons - CC BY - 4.0 International
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