A rigorous reconstruction of scenario-based real choice making reveals the incompleteness of decision-modeling and the practical prevalence of uncertainty. Theoretically complete models conceal it. As a remedy a scenario-based procedure of coping with uncertainty can prescribe how the boundedly...

This paper analyses the behavior of an individual who wants to maximize his utility function, but he is not able to evaluate it. There are many ways to choose a single alternative from a given set. We show that a unique utility maximizing procedure exists. Choices induced by this optimal...

For non-economists, it is often difficult to understand why economists place so much emphasis on the self-interest motive. It is obvious that people act out of a variety of motives - gratitude, anger, social obligation and many, many other motives. There are several reasons why economists still...

Using the techniques of revealed preference analysis, we study a two-stage model of choice behavior. In the first stage, the decision maker maximizes a menu-dependent binary relation encoding preferences that are imperfectly perceived. In the second, a menu-independent binary relation is...

How do human beings make decisions when, as the evidence indicates, the assumptions of the Bayesian rationality approach in economics do not hold? Do human beings optimize, or can they? Several decades of research have shown that people possess a toolkit of heuristics to make decisions under...

Portuguese Abstract: Discuto neste artigo a concepção de racionalidade de Herbert A. Simon em duas de suas principais definições gerais: a racionalidade limitada e a racionalidade procedimental. Argumento que a segunda é a que melhor sintetiza a visão do autor sobre o comportamento...

How can errors in decision-making by rationally behaving individuals be explained? The concepts of bounded rationality proposed by H. Simon and of imperfect information in the complex reality by F. Hayek attack the over-restrictive assumption of perfectly informed individuals or organisms in...

We study two-stage choice procedures in which the decision maker first preselects the alternatives whose values according to a criterion pass a menu-dependent threshold, and then maximizes a second criterion to narrow the selection further. This framework overlaps with several existing models...

Interaction, the act of mutual influence, is an essential part of daily life and economic decisions. This paper presents an individual decision procedure for interacting individuals. According to our model, individuals seek influence from each other for those issues that they cannot solve on...