The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality?
<p>Why would decision makers (DMs) adopt heuristics, priors, or in short “habits” that prevent them from optimally using pertinent information—even when such information is freely-available? One answer, Herbert Simon’s “procedural rationality” regards the question invalid: DMs do not, and in f...
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2022
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| _version_ | 1864513567507611648 |
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| author | Elias L. Khalil (20518877) |
| author_facet | Elias L. Khalil (20518877) |
| author_role | author |
| dc.creator.none.fl_str_mv | Elias L. Khalil (20518877) |
| dc.date.none.fl_str_mv | 2022-11-22T21:14:19Z |
| dc.identifier.none.fl_str_mv | 10.1007/s11229-022-03815-7 |
| dc.relation.none.fl_str_mv | https://figshare.com/articles/journal_contribution/The_information_inelasticity_of_habits_Kahneman_s_bounded_rationality_or_Simon_s_procedural_rationality_/21597498 |
| dc.rights.none.fl_str_mv | CC BY 4.0 info:eu-repo/semantics/openAccess |
| dc.subject.none.fl_str_mv | Economics Applied economics Human society Sociology Philosophy and religious studies Philosophy Heuristics (priors) Cognitive cost Mental economy Dual process theory Perspectives (framing contexts) Ratio bias Routines Institutions Prejudice Cognitive illusions Satisficing Bourdieu’s habitus American pragmatism (John Dewey) |
| dc.title.none.fl_str_mv | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| dc.type.none.fl_str_mv | Text Journal contribution info:eu-repo/semantics/publishedVersion text contribution to journal |
| description | <p>Why would decision makers (DMs) adopt heuristics, priors, or in short “habits” that prevent them from optimally using pertinent information—even when such information is freely-available? One answer, Herbert Simon’s “procedural rationality” regards the question invalid: DMs do not, and in fact cannot, process information in an optimal fashion. For Simon, habits are the primitives, where humans are ready to replace them only when they no longer sustain a pregiven “satisficing” goal. An alternative answer, Daniel Kahneman’s “mental economy” regards the question valid: DMs make decisions based on optimization. Kahneman understands optimization not differently from the standard economist’s “bounded rationality.” This might surprise some researchers given that the early Kahneman, along with Tversky, have uncovered biases that appear to suggest that choices depart greatly from rational choices. However, once we consider cognitive cost as part of the constraints, such biases turn out to be occasional failures of habits that are otherwise optimal on average. They are optimal as they save us the cognitive cost of case-by-case deliberation. While Kahneman’s bounded rationality situates him in the neoclassical economics camp, Simon’s procedural rationality echoes Bourdieu’s “habitus” camp. To abridge the fault line of the two camps, this paper proposes a “two problem areas hypothesis.” Along the neoclassical camp, habits satisfy wellbeing, what this paper calls “substantive satisfaction.” Along the Bourdieu camp, habits satisfy belonging, love, and bonding with one’s environment, what this paper calls “transcendental satisfaction.”</p><h2>Other Information</h2> <p> Published in: Synthese<br> License: <a href="https://creativecommons.org/licenses/by/4.0" target="_blank">https://creativecommons.org/licenses/by/4.0</a><br>See article on publisher's website: <a href="http://dx.doi.org/10.1007/s11229-022-03815-7" target="_blank">http://dx.doi.org/10.1007/s11229-022-03815-7</a></p> |
| eu_rights_str_mv | openAccess |
| id | Manara2_671e0799db8f677da73dd05a338a5fa0 |
| identifier_str_mv | 10.1007/s11229-022-03815-7 |
| network_acronym_str | Manara2 |
| network_name_str | Manara2 |
| oai_identifier_str | oai:figshare.com:article/21597498 |
| publishDate | 2022 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| rights_invalid_str_mv | CC BY 4.0 |
| spelling | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality?Elias L. Khalil (20518877)EconomicsApplied economicsHuman societySociologyPhilosophy and religious studiesPhilosophyHeuristics (priors)Cognitive costMental economyDual process theoryPerspectives (framing contexts)Ratio biasRoutinesInstitutionsPrejudiceCognitive illusionsSatisficingBourdieu’s habitusAmerican pragmatism (John Dewey)<p>Why would decision makers (DMs) adopt heuristics, priors, or in short “habits” that prevent them from optimally using pertinent information—even when such information is freely-available? One answer, Herbert Simon’s “procedural rationality” regards the question invalid: DMs do not, and in fact cannot, process information in an optimal fashion. For Simon, habits are the primitives, where humans are ready to replace them only when they no longer sustain a pregiven “satisficing” goal. An alternative answer, Daniel Kahneman’s “mental economy” regards the question valid: DMs make decisions based on optimization. Kahneman understands optimization not differently from the standard economist’s “bounded rationality.” This might surprise some researchers given that the early Kahneman, along with Tversky, have uncovered biases that appear to suggest that choices depart greatly from rational choices. However, once we consider cognitive cost as part of the constraints, such biases turn out to be occasional failures of habits that are otherwise optimal on average. They are optimal as they save us the cognitive cost of case-by-case deliberation. While Kahneman’s bounded rationality situates him in the neoclassical economics camp, Simon’s procedural rationality echoes Bourdieu’s “habitus” camp. To abridge the fault line of the two camps, this paper proposes a “two problem areas hypothesis.” Along the neoclassical camp, habits satisfy wellbeing, what this paper calls “substantive satisfaction.” Along the Bourdieu camp, habits satisfy belonging, love, and bonding with one’s environment, what this paper calls “transcendental satisfaction.”</p><h2>Other Information</h2> <p> Published in: Synthese<br> License: <a href="https://creativecommons.org/licenses/by/4.0" target="_blank">https://creativecommons.org/licenses/by/4.0</a><br>See article on publisher's website: <a href="http://dx.doi.org/10.1007/s11229-022-03815-7" target="_blank">http://dx.doi.org/10.1007/s11229-022-03815-7</a></p>2022-11-22T21:14:19ZTextJournal contributioninfo:eu-repo/semantics/publishedVersiontextcontribution to journal10.1007/s11229-022-03815-7https://figshare.com/articles/journal_contribution/The_information_inelasticity_of_habits_Kahneman_s_bounded_rationality_or_Simon_s_procedural_rationality_/21597498CC BY 4.0info:eu-repo/semantics/openAccessoai:figshare.com:article/215974982022-11-22T21:14:19Z |
| spellingShingle | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? Elias L. Khalil (20518877) Economics Applied economics Human society Sociology Philosophy and religious studies Philosophy Heuristics (priors) Cognitive cost Mental economy Dual process theory Perspectives (framing contexts) Ratio bias Routines Institutions Prejudice Cognitive illusions Satisficing Bourdieu’s habitus American pragmatism (John Dewey) |
| status_str | publishedVersion |
| title | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| title_full | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| title_fullStr | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| title_full_unstemmed | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| title_short | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| title_sort | The information inelasticity of habits: Kahneman’s bounded rationality or Simon’s procedural rationality? |
| topic | Economics Applied economics Human society Sociology Philosophy and religious studies Philosophy Heuristics (priors) Cognitive cost Mental economy Dual process theory Perspectives (framing contexts) Ratio bias Routines Institutions Prejudice Cognitive illusions Satisficing Bourdieu’s habitus American pragmatism (John Dewey) |