This paper aims to interpret and formalize Herbert Simon's notions of bounded rationality, satisficing and heuristics in terms of computability theory and computational complexity theory. Simon's theory of human problem solving is analysed in the light of Turing's work on Solvable and Unsolvable...

Formally, the orthodox rational agentís 'Olympian' choices ([14], p.19) are made in a static framework. However, a formalization of consistent choice, underpinned by computability, suggests satisficing in a boundedly rational framework is not only more general than the model of 'Olympian'...

We experimentally investigate imitation in investment choices and focus on cognitive aspects of decision making. At this aim, we manipulate three main dimensions of choice: time pressure, normative content of social information, and uncertainty of the investment. We document the existence of...

Considering the case of diversified firms within a transition country such as Vietnam, this paper investigates diversification relatedness taking into account both firm-specific and industry-level components. Two measures of relatedness, the survivor-based and the SIC distances approach, are...

We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives....

We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show...

According to this work, the ‘financial instability hypothesis’ is not an interpretation of The General Theory as Minsky (1975, 1986) thought. Keynes and Minsky undoubtedly have much in common. Specifically, both of them recognize the limits of individual and collective rationality. Minsky,...

Recent developments in macroeconomic policy, both in terms of theory and practice, have elevated monetary policy while fiscal policy has been downgraded. The latter is rarely mentioned in policy discussion, apart from arguing to place limits on budget deficits and fiscal variables. This paper...