The essence of bounded rationality and debate over its value

Abstract

Bounded rationality theory derives from contemporary cognitive psychology, manifests itself in economics, and radiates to many disciplines. However, different opinions exist on what bounded rationality is and what it means to people, not only causing confusion in theory but also bringing confusion in practice. The purpose of this study is to: (1) clarify the essential meaning of bounded rationality from the philosophical and historical backgrounds of human rational evolution; (2) put forward different views on the value of bounded rationality; (3) summarize the far-reaching historical significance and theoretical value of existing achievements. The author points out that bounded rationality is not the optimization under constraint, not to mention the irrationality. In essence, it is an objective description of the level of human rational evolution and development so far, that is, human beings are rational either in the attitude to reality or in the ability to recognize and transform reality. However, limits to human rationality are observed. Bounded rationalists question popular rationalism in contemporary social science and the reliability of the methodology and knowledge system derived from it, but they do not question rationality itself. They eliminate the dualism thinking mode of rationalism or irrationalism in history, which provides us with a new perspective to understand the nature of rationality from the resource, quantitative, and dynamic development views. In the sense of value rationality, bounded rationality is defective, but in the sense of instrumental rationality, bounded rationality is reasonable, so finding a proper balance point between them is necessary. The concept of bounded rationality in psychology and its extensive influence have led to another human rational evolution after the “probability revolution” of the Renaissance. It is one of the most important contributions made by this discipline to the treasure house of human thought and knowledge. It not only has far-reaching historical significance but also has interdisciplinary methodological significance.