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Artificial Intelligence and Economic Theory: Skynet in the Market pp 41–50Cite as

Bounded Rationality

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Part of the book series: Advanced Information and Knowledge Processing ((AI&KP))

Abstract

Rational decision making involves using information which is almost always imperfect and incomplete, together with some intelligent machine, which if it is a human being is inconsistent in making a decision that maximizes utility. Since the world is not perfect and decisions are made irrespective of the fact that the information to be used is incomplete and imperfect, these decisions are rationally limited (bounded). Recent advances in artificial intelligence and the continual improvement of computer processing power due to Moore’s law have implications for the theory of bounded rationality . These advances expand the bounds within which a rational decision making process is exercised and, thereby, increases the probability of making rational decisions.

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Author information

Authors and Affiliations

  1. Faculty of Engineering and the Built Environment​, University of Johannesburg, Auckland Park, South Africa

    Tshilidzi Marwala

  2. Department of Electrical and Electronic Engineering Science, Faculty of Engineering and the Built Environment​, University of Johannesburg, Auckland Park, South Africa

    Evan Hurwitz

Authors
  1. Tshilidzi Marwala
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  2. Evan Hurwitz
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Correspondence to Tshilidzi Marwala .

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Marwala, T., Hurwitz, E. (2017). Bounded Rationality. In: Artificial Intelligence and Economic Theory: Skynet in the Market. Advanced Information and Knowledge Processing. Springer, Cham. https://doi.org/10.1007/978-3-319-66104-9_4

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  • DOI: https://doi.org/10.1007/978-3-319-66104-9_4

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-66103-2

  • Online ISBN: 978-3-319-66104-9

  • eBook Packages: Computer ScienceComputer Science (R0)

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