Some of the most challenging decisions faced by humans and other social species are those arising from an environment comprising the decisions of conspecifics. The particular demands of social environments such as the necessity of responding quickly to decisions made by others, coordinating...

Behavioral economists have done a great service in connecting psychology and economics. Up to now, however, most have focused on cognitive illusions and anomalies, in order to prove the descriptive failure of neoclassical economic models. The key problems in the cognitive illusions literature...

One-reason decision making is a label for a class of fast and frugal heuristics that base decisions on only one reason. These heuristics do not attempt to optimally fit parameters to a given environment; rather, they have simple structural features and bet that the environment will fit them. By...

This chapter reports how stock portfolios that employed recognition heuristics fared relative to market indices, mutual funds, chance or dartboard portfolios, individual investment decisions, portfolios of unrecognized stocks and other benchmarks proposed by third parties.The surprising...

This chapter focuses on the recognition heuristic and the less is the more effect. Instead of being unboundedly rational, it is ecologically rational, that is, reasonable with respect to some environments but not others. There are domains in which the recognition heuristic will not work. A wise...

This chapter focuses on bounded rationality as the study of heuristics that can exploit structures of their environments, we use the term ecological rationality. If one focuses only on cognitive limitations, one can hardly understand why cognition works as well as it does just as looking at one...