A bullet points summary for the video: Herbert Simon: I first gave the economists’ account of decision-making process as a basis of showing how I chose to depart from it. “Bounded Rationality” can be described as a response to the economic theory of “Utility function” which simply suggests that people look for a wide array of choices they have, then pick the one that maximizes their utility. Actual choices people make are different from ideal choices. “Utility Function” theory seemed dubious to me because I couldn’t find consistent utility function, intentions and preferences change, also full information and full knowledge of consequences are never available. “Bounded Rationality” is a warning to economists that you cannot predict human behavior by setting up an abstract model of what is rational.
Very helpful. Here's my version of the notes, since I did them anyway. Someone might find a second take useful. It's not an easy video to listen to. The problems with ‘utility maximisation’ as a theory about decision making: People don’t necessarily make decisions based on the Economists notion of utility, and they don’t necessarily make choices in a consistent way. (They don’t necessarily look at an array of choices in some formalised way and choose the one that maximises utility.) His own experience and what he observed in his friends was that this utility maximising process didn’t really happen. He thinks what we prefer has a lot to do with what our attention is on at a given moment. We don’t full information about the consequence of the different options. When several people are involved, we can’t compare each person’s utility. Bounded reality: A warning to economists You can’t theorise about how people thing in the abstract, something modern classical economics seek to do. They build models based on human behaviour without going out to see what people actually do. (ain’t that the truth)
¿De donde es el vídeo original, de que institución es el logo que aparece en la esquina superior derecha?. Te agradecería me indicaras es para colocar la fuente primaria en mi tesis
A bullet points summary for the video:
Herbert Simon: I first gave the economists’ account of decision-making process as a basis of showing how I chose to depart from it.
“Bounded Rationality” can be described as a response to the economic theory of “Utility function” which simply suggests that people look for a wide array of choices they have, then pick the one that maximizes their utility.
Actual choices people make are different from ideal choices.
“Utility Function” theory seemed dubious to me because I couldn’t find consistent utility function, intentions and preferences change, also full information and full knowledge of consequences are never available.
“Bounded Rationality” is a warning to economists that you cannot predict human behavior by setting up an abstract model of what is rational.
Very helpful.
Here's my version of the notes, since I did them anyway. Someone might find a second take useful. It's not an easy video to listen to.
The problems with ‘utility maximisation’ as a theory about decision making:
People don’t necessarily make decisions based on the Economists notion of utility, and they don’t necessarily make choices in a consistent way. (They don’t necessarily look at an array of choices in some formalised way and choose the one that maximises utility.)
His own experience and what he observed in his friends was that this utility maximising process didn’t really happen. He thinks what we prefer has a lot to do with what our attention is on at a given moment.
We don’t full information about the consequence of the different options.
When several people are involved, we can’t compare each person’s utility.
Bounded reality:
A warning to economists
You can’t theorise about how people thing in the abstract, something modern classical economics seek to do. They build models based on human behaviour without going out to see what people actually do. (ain’t that the truth)
"One finds limits by pushing them." - Herbert Simon
His voice is the voice we use in computer
¿De donde es el vídeo original, de que institución es el logo que aparece en la esquina superior derecha?. Te agradecería me indicaras es para colocar la fuente primaria en mi tesis
Does anyone know what year this is from?
Herbert Simon died in 2001. He was 85.
His voice,……
I don't even speak portuguese and can tell you that the translation is wrong...