Bounded Rationality

Bounded Rationality: A Response to Rational Analysis

Simon criticizes Anderson's proposed rational analysis as misdirected based on the following three arguments:
  1. Humans are not optimal and only in some cases locally optimal;
  2. Assumptions made by cognitive modelers about how an agent performs architectural tasks, which Anderson labels unnecessary, are subsequently tacitly repeated by him in his analyses;
  3. Data regarding human behavior on isomorphic task domains explicitly denies the theory. (Question: Item 2 in Anderson's recipe states that one must model the environment to which the agent has adapted. Does this not limit the task to domain to particular isomorphs and thereby negate the criticism?)


Evolution did not give rise to optimal agents, but to agents which are in some senses locally optimal at best, locally satisfactory in norm, and becoming extinct at worst. Thus, a theory based upon optimal behaviors is tenuous at best.

Optimization implies that the goals of the agent are known explicitly. When synthesizing or tasking an agent one can know or determine the goals of the agent, but when analyzing the behavior of an arbitrary agent, one does not know the goals. In fact, the range of rational goals can lead to such variant behavior that assumptions about the goals cannot be made with confidence. The example cited in depth by Simon is that of economic predictions.

Another implicit assumption underlying optimization is that the utility functions are known (see recipe item 3). In fact, real agents must often act with insufficient knowledge by estimating these. Estimates will range from accurate to wrong, from simple to sophisticated. Since rational analysis- a variant of which lead to the economic theories plagued with these problems- does not account for these phenomena, it cannot be taken as a panacea paradigm for analysis.


Anderson criticizes mechanism-focused cognitive modelers with making unnecessary assumptions about how an agent performs architectural functions such as memory management and computations. However in his analyses, he is forced to make similar assumptions. Examine the assumptions made by Anderson in his analyses:
  1. Fan Effect
  2. Power-law of Practice
  3. Categorization

Rationality versus behavior

While rational analysis can yield some information about cognition such as that a solution can be found, the particular solution found by particular subjects cannot necessarily be found. Anderson argues that by defining the environment to which the subject has adapted, the optimal solution will be the solution determined by the subject and that these constraints uniquely define the optimum. Simon argues that these constraints are not sufficient to determine uniqueness. Without a uniquely defined solution, subject-specific strategies cannot be determined nor studied.

Bounded Rationality

In 1957, Simon proposed the notion of

Bounded Rationality: that property of an agent that behaves in a manner that is nearly optimal with respect to its goals as its resources will allow.

Bounded rationality better describes agent behaviors than Anderson's optimal rationality approach for the following reasons:

In considering bounded rationality, Simon suggests that researchers not limit their focus to signature data but look for all the data they can in order to uncover the underlying processes. He concludes by providing a lower bound of relevance to cognitive analysis:
The exact ways in which neurons accomplish their functions is not important- only their functional capabilities and the organization of these.

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