This short book introduces the field of bounded rationality to a
beginning readership in economics. It is intended to be a tour of the
key concepts involved in the modelling of bounded rationality, the
approaches that have been adopted and some of the most revealing, and at
times surprising, findings that have been generated. The book explores
how bounded rationality has been used in economic models to shed light
on real life behaviour and how doing so has led to specific policy
implications that would otherwise have gone unappreciated. The
exposition is intended to be non-technical and free from any
mathematical expressions and workings and the focus throughout is
primarily on the behaviour of individuals or organisations within given
situations rather than on macroeconomic concerns. How the field has
evolved since the 1950s and the strengths and weaknesses of its current
research programme, including its relationship with behavioural
economics, are assessed.
Understanding how we take economic decisions and how we depart from
rational choice theory has become fundamental to understanding the
workings of the economy at all levels. The book is therefore excellent
preparatory reading for degree-level courses in economics as well as
specific courses in behavioural economics and philosophy of economics.
