Annu.Rev.Polit.Sci.1999.2:297-321 Copyright 1999 by Anmual Reviews.All rights reserved BOUNDED RATIONALITY Ajuo asn Bryan D.Jones Department of Political Science,University of Washington,Seattle,Washington 98195;e-mail:bdjones@u.washington.edu KEY WORDS:decision making,behavioral organization theory,behavioral decision theory, political psychology ABSTRACT Findings from behavioral organization theory,behavioral decision theory, survey research,and experimental economics leave no doubt about the fail- ure of rational choice as a descriptive model of human behavior.But this does not mean that people and their politics are irrational.Bounded rational- ity asserts that decision makers are intendedly rational;that is,they are goal- oriented and adaptive,but because of human cognitive and emotional archi- tecture,they sometimes fail,occasionally in important decisions.Limits on rational adaptation are of two types:procedural limits,which limit how we go about making decisions,and substantive limits,which affect particular choices directly.Rational analysis in institutional contexts can serve as a standard for adaptive,goal-oriented human behavior.In relatively fixed task environments,such as asset markets or elections,we should be able to divide behavior into adaptive,goal-oriented behavior(that is,rational action)and behavior that is a consequence of processing limits,and we should then be able to measure the deviation.The extent of deviation is an empirical issue. These classes are mutually exclusive and exhaustive,and they may be exam- ined empirically in situations in which actors make repeated similar choices. INTRODUCTION Do people make rational decisions in politics and economics?Not if by "rational"we mean that they demonstrate conformity to the classic expected- utility model.There is no longer any doubt about the weight of the scientific evidence;the expected-utility model of economic and political decision mak- 3 ing is not sustainable empirically.From the laboratory comes failure after failure of rational expected utility to account for human behavior.From sys- tematic observation in organizational settings,scant evidence of behavior based on the expected-utility model emerges. 297 1094-2939/99/0616-0297S08.001094-2939/99/0616-0297$08.00 297 Annu. Rev. Polit. Sci. 1999. 2:297–321 Copyright © 1999 by Annual Reviews. All rights reserved BOUNDED RATIONALITY Bryan D. Jones Department of Political Science, University of Washington, Seattle, Washington 98195; e-mail: bdjones@u.washington.edu KEY WORDS: decision making, behavioral organization theory, behavioral decision theory, political psychology ABSTRACT Findings from behavioral organization theory, behavioral decision theory, survey research, and experimental economics leave no doubt about the fail￾ure of rational choice as a descriptive model of human behavior. But this does not mean that people and their politics are irrational. Bounded rational￾ity asserts that decision makers are intendedly rational; that is, they are goal￾oriented and adaptive, but because of human cognitive and emotional archi￾tecture, they sometimes fail, occasionally in important decisions. Limits on rational adaptation are of two types: procedural limits, which limit how we go about making decisions, and substantive limits, which affect particular choices directly. Rational analysis in institutional contexts can serve as a standard for adaptive, goal-oriented human behavior. In relatively fixed task environments, such as asset markets or elections, we should be able to divide behavior into adaptive, goal-oriented behavior (that is, rational action) and behavior that is a consequence of processing limits, and we should then be able to measure the deviation. The extent of deviation is an empirical issue. These classes are mutually exclusive and exhaustive, and they may be exam￾ined empirically in situations in which actors make repeated similar choices. INTRODUCTION Do people make rational decisions in politics and economics? Not if by “rational” we mean that they demonstrate conformity to the classic expected￾utility model. There is no longer any doubt about the weight of the scientific evidence; the expected-utility model of economic and political decision mak￾ing is not sustainable empirically. From the laboratory comes failure after failure of rational expected utility to account for human behavior. From sys￾tematic observation in organizational settings, scant evidence of behavior based on the expected-utility model emerges. Annu. Rev. Polit. Sci. 1999.2:297-321. Downloaded from arjournals.annualreviews.org by UNIVERSITY OF WASHINGTON - HEALTH SCIENCES LIBRARIES on 09/25/06. For personal use only