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  4. September 2024
  5. Bounded Rationality in Choice Theory: A Survey

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

Bounded Rationality in Choice Theory: A Survey

  • Geoffroy de Clippel
  • Kareen Rozen
Journal of Economic Literature
vol. 62, no. 3, September 2024
(pp. 995–1039)
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Abstract

A vibrant literature incorporates elements of bounded rationality into choice theory. We survey this work, discussing five central ways in which the literature has modeled departures from the rational choice procedure. We discuss the variety of purposes axiomatic choice characterizations serve for these positive theories, delve into experimental tests, synthesize the welfare debate, and assess important future directions.

Citation

de Clippel, Geoffroy, and Kareen Rozen. 2024. "Bounded Rationality in Choice Theory: A Survey." Journal of Economic Literature, 62 (3): 995–1039. DOI: 10.1257/jel.20231592

Additional Materials

JEL Classification

  • D11 Consumer Economics: Theory
  • D44 Auctions
  • D60 Welfare Economics: General
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making