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Bounded rationality

Bounded rationality
Bounded rationality is the idea that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision. It was proposed by Herbert A. Simon as an alternative basis for the mathematical modeling of decision making, as used in economics, political science and related disciplines; it complements rationality as optimization, which views decision-making as a fully rational process of finding an optimal choice given the information available.[1] Another way to look at bounded rationality is that, because decision-makers lack the ability and resources to arrive at the optimal solution, they instead apply their rationality only after having greatly simplified the choices available. Some models of human behavior in the social sciences assume that humans can be reasonably approximated or described as "rational" entities (see for example rational choice theory). Origins[edit]

http://en.wikipedia.org/wiki/Bounded_rationality

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Cognitive closure (philosophy) It cannot be simply taken for granted that the human reasoning faculty is naturally suited for answering philosophical questions: the questions and their subject matter are one thing; and rational faculty, as a human trait, is another. From the fact that it is the best faculty we have… for doing philosophy it does not follow that it is a remotely good or adequate faculty for that purpose.[3]—Colin McGinn, Problems in Philosophy: The Limits of Inquiry When human minds interact with philosophical problems, especially those of the form 'How is X possible?', they are apt to go into one of four possible states. Either (i) they try to domesticate the object of puzzlement by providing a reductive or explanatory theory of it; or (ii) they declare it irreducible and hence not open to any levelling account; or (iii) they succumb to a magical story or image of what seems so puzzling; or (iv) they simply eliminate the source of trouble for fear of ontological embarrassment... Jump up ^ Errol E.

Collared or Untied: Reflections on Work in American Culture 1.Fred Armisen opened the first season of the TV show Portlandia singing “The Dream of the 90s is Alive in Portland,” a dream of pierced, tattooed folks hanging out, hot girls wearing glasses and putting images of birds on everything, and grown-ups making a living making coffee. He asks Carrie Brownstein if she remembers the ’90s, when people were unambitious and “they had no occupations whatsoever.” “I thought that died out a long time ago,” she says, wonderingly, before she leaves L.A. to join Armisen’s ragged troupe of relaxed and minimally-employed folks dedicated to the art of skateboarding. The context missing from this hilarious send-up is that Portland experienced a decade-long recession in the early years of the 2000s, and didn’t bounce back from it until the last couple of years.

Existential crisis An existential crisis is a moment at which an individual questions the very foundations of their life: whether their life has any meaning, purpose or value.[1] This issue of the meaning and purpose of existence is the topic of the philosophical school of existentialism. Description[edit] An existential crisis may result from: The sense of being alone and isolated in the world;A new-found grasp or appreciation of one's mortality;Believing that one's life has no purpose or external meaning;Searching for the meaning of life;Shattering of one's sense of reality, or how the world is;Awareness of one's freedom and the consequences of accepting or rejecting that freedom;An extremely pleasurable or hurtful experience that leaves one seeking meaning;

Cognitive bias A cognitive bias is a pattern of deviation in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.[1] Individuals create their own “subjective social reality” from their perception of the input.[2] An individual’s construction of social reality, not the objective input, may dictate their behaviour in the social world.[3] Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.[4][5][6] Some cognitive biases are presumably adaptive. A continually evolving list of cognitive biases has been identified over the last six decades of research on human judgment and decision-making in cognitive science, social psychology, and behavioral economics. Cognitive biases are important to study because “systematic errors” highlight the “psychological processes that underlie perception and judgement” (Tversky & Kahneman,1999, p. 582). Overview[edit] Types[edit]

THE FINANCIAL PHILOSOPHER: Foundations vs 'Castles in the Air' "I learned this, at least, by my experiment: that if one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours. He will put some things behind, will pass an invisible boundary; new, universal, and more liberal laws will begin to establish themselves around and within him; or the old laws be expanded, and interpreted in his favor in a more liberal sense, and he will live with the license of a higher order of beings. In proportion as he simplifies his life, the laws of the universe will appear less complex, and solitude will not be solitude, nor poverty poverty, nor weakness weakness. If you have built castles in the air, your work need not be lost; that is where they should be.

Analysis paralysis Analysis paralysis or paralysis by analysis is an anti-pattern, the state of over-analyzing (or over-thinking) a situation so that a decision or action is never taken, in effect paralyzing the outcome. A decision can be treated as over-complicated, with too many detailed options, so that a choice is never made, rather than try something and change if a major problem arises. A person might be seeking the optimal or "perfect" solution upfront, and fear making any decision which could lead to erroneous results, when on the way to a better solution. The phrase describes a situation where the opportunity cost of decision analysis exceeds the benefits that could be gained by enacting some decision, or an informal or non-deterministic situation where the sheer quantity of analysis overwhelms the decision-making process itself, thus preventing a decision.

Illusion of asymmetric insight The illusion of asymmetric insight is a cognitive bias whereby people perceive their knowledge of others to surpass other people's knowledge of themselves. This bias seems to be due to the conviction that observed behaviors are more revealing of others than self, while private thoughts and feelings are more revealing of the self.[1] A study finds that people seem to believe that they know themselves better than their peers know themselves and that their social group knows and understands other social groups better than other social groups know them.[1] For example: Person A knows Person A better than Person B knows Person B or Person A. Why Everybody Who Doesn’t Hate Bitcoin Loves It: Full Transcript This is a transcript of the Freakonomics Radio podcast “Why Everybody Who Doesn’t Hate Bitcoin Loves It.” [MUSIC: Greg Ruby Quartet, “Swing for Dudley” (from Look Both Ways)] Stephen J. DUBNER: Hey, podcast listeners. We made the episode you’re about to hear because you asked for it.

The Last Messiah Den sidste Messias (English: The Last Messiah), published in 1933, is one of Peter Wessel Zapffe's most significant essays as well as concepts, which sums up his own thoughts from his book, On the Tragic, and, as a theory describes a reinterpretation of Friedrich Nietzsche's Übermensch. Zapffe believed that existential angst in humanity was the result of an overly evolved intellect, and that people overcome this by "artificially limiting the content of consciousness.

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