Citation:
Aumann, Robert J. . “Rationality And Bounded Rationality”. Discussion Papers 1995. Web.
Abstract:
A survey of bounded rationality models and ideas in Game Theory. Topics covered include: The evolutionary approach to optimization – and specifically to game theory – and its implications for the idea of bounded rationality; evolutionary dynamics; "rule rationality" as opposed to "act rationality"; "trembles" and refinements in general; "crazy" perturbations; failure of common knowledge of rationality; limiting average payoff in infinitelyrepeated games; epsilon equilibria; players modeled as computers, finite state automata, or Turing machines; paradoxes (such as Ellsberg or Allais); laboratory experiments; and finally, an open problem.