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Economic modelling with low-cognition agents

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  • Ormerod, Paul

Abstract

The standard socio-economic model (SSSM) postulates very considerable cognitive powers on the part of its agents. They are able to gather all relevant information in any given situation, and to take the optimal decision on the basis of it, given their tastes and preferences. This behavioural rule is postulated to be universal. The concept of bounded rationality relaxes this somewhat, by permitting agents to have access to only limited amounts of information. But agents still optimise subject to their information set and tastes.

Suggested Citation

  • Ormerod, Paul, 2006. "Economic modelling with low-cognition agents," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 60-63.
    • Handle: RePEc:eee:phsmap:v:370:y:2006:i:1:p:60-63
    DOI: 10.1016/j.physa.2006.04.035
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    References listed on IDEAS

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    1. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1.
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