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Key Concepts

The future is uncertain and hard to predict. Nonetheless, people have to make countless decisions every day. To do so, they use simple rules of thumb, so-called heuristics. To explore and understand these heuristics, researchers investigated the rationality of human reasoning.

Most approaches in psychology, economics, and behavioral biology assume that animals and human beings have unlimited resources such as time and knowledge and that they reason according to the rules of logic. The approach taken here, in contrast, subscribes to three key concepts that were developed to describe how human beings make decisions in real-life situations:

Bounded rationality

Ecological rationality

Social rationality

On the basis of these concepts, researchers designed models of cognitive processes and the environments in which these processes occur. By means of experiments, computer simulations, and mathematical analyses, they investigated when and why a strategy leads to good results. The best test of this research is to apply it in the real world, for instance, to train decision-makers in medicine, law, and business.

Key Reference

Gigerenzer, G., & Gaissmaier, W. (2011). Heuristic decision making. Annual Review of Psychology, 62. 451-82.