Semi-normative theories of bounded rationality – back to German roots

Abstract

The ascent of behavioral economics suggests reviving bounded rationality models that have so far been sidelined in neo-classical economics. Applications of aspiration-based satisficing to negotiations are a case in point. Background, core ideas and theoretical components of so-called Dynamic Aspiration Balance Theory (DABT) are re-introduced to show that DABT can account for bargaining behavior in terms of what has become known as fast and frugal heuristics. A revival of interest in so-called (semi-) normative theories that can be traced back to forerunners from the 1970s and 1980s may open up promising perspectives for future research.

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