rationality, a theory about economic decision-making that Simon himself preferred to call âsatisficingâ, a combination of two words: âsatisfyâ and âsufficeâ. Contrary ...
Creationism and Bounded Rationality I found this quote from today's Computing Reviews quotes to be rather interesting. “creationism n. The (false) belief that large, innovative designs can be completely specified in advance and then painlessly magicked out of the void by the normal efforts of a team of normally talented programmers. In fact, experience has shown repeatedly that good designs arise only from evolutionary, exploratory interaction between one (or at most a small handful of) exceptionally able designer(s) and an active user population—and that the first try at a big new idea is always wrong. Unfortunately, because these truths don’t fit the planning models beloved of management, they are generally ignored.” - Eric S. Raymond The New Hacker s Dictionary, 1991. I would like to call your attention to another related concept invented by our senior past mentor and Nobel Laureate Dr. Professor Herb Simon: Bounded Rationality. http://en.wikipedia.org/wiki/Bounded_rationality http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Bounded_rationality.html Herbert Simon (1916-2001) is most famous for what is known to economists as the theory of bounded rationality, a theory about economic decision-making that Simon himself preferred to call “satisficing”, a combination of two words: “satisfy” and “suffice”. Contrary to the tenets of classical economics, Simon maintained that individuals do not seek to maximize their benefit from a particular course of action (since they cannot assimilate and digest all the information that would be needed to do such a thing). Not only can they not get access to all the information required, but even if they could, their minds would be unable to process it properly. The human mind necessarily restricts itself. It is, as Simon put it, bounded by “cognitive limits”.
Hence people, in many different situations, seek something that is “good enough”, something that is satisfactory. Humans, for example, when in shopping mode, aspire to something that they find acceptable, although that may not necessarily be optimal. They look through things in sequence and when they come across an item that meets their aspiration level they go for it. This real-world behavior is what Simon called satisficing. He applied the idea to organizations as well as to individuals. Managers do much the same thing as shoppers in a mall. “Whereas economic man maximizes, selects the best alternative from among all those available to him,” he wrote, “his cousin, administrative man, satisfices, looks for a course of action that is satisfactory or ‘good enough'.” He went on to say: “Because he treats the world as rather empty and ignores the interrelatedness of all things (so stupefying to thought and action), administrative man can make decisions with relatively simple rules of thumb that do not make impossible demands upon his capacity for thought.” http://www.economist.com/node/13350892
Bare in mind that the context here is the exploration and derivation of human contrived systems. But the philosophy of creationism and bounded rationality, well, feel free to comment as your mind suggests.
Dave David Rine, Professor Emeritus and Founding Chair, George Mason University.
Bounded Rationality as Applied to Business Economics http://www.businessdictionary.com/definition/bounded-rationality.html Concept that decision makers (irrespective of their level of intelligence) have to work under three unavoidable constraints: (1) only limited, often unreliable, information is available regarding possible alternatives and their consequences, (2) human mind has only limited capacity to evaluate and process the information that is available, and (3) only a limited amount of time is available to make a decision. Therefore even individuals who intend to make rational choices are bound to make satisficing (rather than maximizing or optimizing) choices in complex situations. These limits (bounds) on rationality also make it nearly impossible to draw up contracts that cover every contingency, necessitating reliance on rules of thumb. Proposed by the US Nobel-laureate economist Herbert Simon (1916-2001) in his 1982 book 'Models Of Bounded Rationality And Other Topics In Economics.' Compare with perfect rationality.
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