Unbounding bounded rationality: Heuristics as the logic of economic discovery

Anna Grandori (Bocconi University)
Magdalena Cholakova (Rotterdam School of Management, Erasmus University)

International Journal of Organization Theory & Behavior

ISSN: 1093-4537

Publication date: 1 March 2013


This paper builds on a long-lasting research program on the micro-foundations of innovative decision making, founded on a development of a neglected epistemic aspect of Simon's work, and on contributions in epistemology, in which heuristics are not procedures that are uncertaintyavoiding, economizing on cognitive and search effort, and problem-space reducing, but procedures that are uncertainty-modeling, investing in research effort, and problem-expanding. The paper offers a summary of the main effective heuristics of that kind so far identified, as applied to real processes of innovative decision making under epistemic uncertainty, such as judging and investing in novel entrepreneurial projects. It argues and shows that, in contrast to the common view, a wide range of those procedures, usually thought to belong to different and rival models, can be fruitfully combined.


Grandori, A. and Cholakova, M. (2013), "Unbounding bounded rationality: Heuristics as the logic of economic discovery", International Journal of Organization Theory & Behavior, Vol. 16 No. 3, pp. 368-392. https://doi.org/10.1108/IJOTB-16-03-2013-B004

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