Skip to main content Accessibility help
Hostname: page-component-684899dbb8-c97xr Total loading time: 0.439 Render date: 2022-05-24T09:59:17.438Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "useRatesEcommerce": false, "useNewApi": true }

8 - Bounded Rationality and Legal Scholarship

Published online by Cambridge University Press:  06 July 2009

Mark D. White
City University of New York
Get access


Any normative framework that has the structure of recommending that decision-makers advance certain goals, and that they do so in accordance with decision theory (DT), runs into the problem of bounded rationality. The problem is how to refine DT so as to be usable by a bounded decision-maker – someone with limited cognitive resources, for whom the full evaluation of her choices is impossible or at least very expensive.

This chapter has two aims. The first, pursued in sections I and II, is to discuss the problem of bounded rationality in general terms. The second, pursued in section III, is to show why the problem creates a gap at the foundations of legal scholarship. In Fairness versus Welfare, Louis Kaplow and Steven Shavell propose a welfarist methodology for legal scholarship. They may be wrong to think that morality is wholly welfarist, but a normative program that says that social welfare is one of a plurality of criteria by which legal scholars should evaluate laws and policies is plausible. But we have no good normative handle on how legal scholars who are bounded in their cognitive abilities should implement a welfarist or pluralistic program.


The term “bounded rationality” is sometimes used by psychologists to describe or explain certain decision-making processes without endorsing or criticizing them. By contrast, the problem of bounded rationality that I discuss in this chapter is normative.

Publisher: Cambridge University Press
Print publication year: 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)


Kaplow, Louis and Shavell, Steven, 2002, Fairness versus Welfare, Cambridge, MA: Harvard University PressGoogle Scholar
Joyce, James M., 1999, The Foundations of Causal Decision Theory, Cambridge: Cambridge University PressCrossRefGoogle Scholar
Joyce, James M. and Gibbard, Allan, 1998, “Causal Decision Theory,” in Barbera, Salvador et al., eds., Handbook of Utility Theory, vol. 1, Dordrecht: Kluwer, pp. 627–666Google Scholar
Lewis, David, 1981, “Causal Decision Theory,” Australasian Journal of Philosophy, 69, pp. 5–30CrossRefGoogle Scholar
Laville, Frederic, 2000, “Foundations of Procedural Rationality: Cognitive Limits and Decision Processes,” Economics and Philosophy, 16, pp. 117–138CrossRefGoogle Scholar
Kreps, David M., 1988, Notes on the Theory of Choice, Boulder and London: Westview PressGoogle Scholar
Adler, Matthew D. and Sanchirico, Chris William, 2006, “Inequality and Uncertainty: Theory and Legal Applications,” University of Pennsylvania Law Review, 155, pp. 279–377CrossRefGoogle Scholar
Adler, Matthew D. and Posner, Eric A., 2006, New Foundations of Cost–Benefit Analysis, Cambridge, MA: Harvard University Press, pp. 25–61Google Scholar
Winkler, Robert L., 2003, An Introduction to Bayesian Inference and Decision, 2nd ed., Gainesville: Probabilistic Publishing, pp. 267–350Google Scholar
Hirshleifer, Jack and Riley, John G., 1992, The Analytics of Uncertainty and Information, Cambridge: Cambridge University Press, pp. 167–208CrossRefGoogle Scholar
Stigler, George J., 1961, “The Economics of Information,” Journal of Political Economy, 69, pp. 213–225CrossRefGoogle Scholar
Baron, Jonathan, 2000, Thinking and Deciding, 3rd ed., Cambridge: Cambridge University PressGoogle Scholar
Hastie, Reid and Dawes, Robyn M., 2001, Rational Choice in an Uncertain World, Thousand Oaks: Sage PublicationsGoogle Scholar
Keren, Gideon and Teigen, Karl H., 2004, “Yet Another Look at the Heuristics and Biases Approach,” in Koehler, Derek J. and Harvey, Nigel, eds., Blackwell Handbook of Judgment and Decision Making, Malden, MA: Blackwell Publishing, pp. 89–109CrossRefGoogle Scholar
Kahneman, Daniel, 2003, “Maps of Bounded Rationality: Psychology for Bounded Economics,” American Economic Review, 93, pp. 1449–1475CrossRefGoogle Scholar
Gigerenzer, Gerd et al., 1999, Simple Heuristics that Make Us Smart, New York: Oxford University Press, pp. 25–29Google Scholar
Simon, Herbert, 1982, 1997, Models of Bounded Rationality, vols. 1–3, Cambridge, MA: MIT PressGoogle Scholar
Simon, Herbert, 1979, 1989, Models of Thought, vols. 1–2, New Haven: Yale University PressGoogle Scholar
Simon, Herbert, 1955, “A Behavioral Model of Rational Choice,” in both Models of Bounded Rationality and Models of ThoughtGoogle Scholar
Byron, Michael, 1998, “Satisficing and Optimality,” Ethics, 109, pp. 67–93CrossRefGoogle Scholar
Byron, Michael, ed., 2004, Satisficing and Maximizing, Cambridge: Cambridge University PressCrossRef
Gigerenzer, Gerd, 2000, Adaptive Thinking: Rationality in the Real World, New York: Oxford University PressGoogle Scholar
Gigerenzer, Gerd and Selten, Reinhard, eds., 1999, Bounded Rationality: The Adaptive Toolbox, Cambridge, MA: MIT Press
Gigerenzer, Gerd, 2006, “Heuristics,” in Gigerenezer, Gerd and Engel, Christoph, eds., Heuristics and the Law, Cambridge, MA: MIT Press, pp. 17–44Google Scholar
Payne, John W. et al., 1993, The Adaptive Decision-Maker, Cambridge: Cambridge University PressCrossRefGoogle Scholar
Hogarth, Robin M. and Karelaia, Natalia, 2007, “Heuristic and Linear Models of Judgment: Matching Rules and Environments,” Psychological Review, 114, pp. 733–758CrossRefGoogle ScholarPubMed
Fasolo, Barbara et al., 2007, “Escaping the Tyranny of Choice: When Fewer Attributes Make Choice Easier,” Marketing Theory, 7, pp. 13–26CrossRefGoogle Scholar
Winterfeldt, Detlof and Edwards, Ward, 1986, Decision Analysis and Behavioral Research, Cambridge: Cambridge University Press, pp. 331–334Google Scholar
Temkin, Larry S., 1996, “A Continuum Argument for Intransitivity,” Philosophy and Public Affairs, 25, pp. 175–210CrossRefGoogle Scholar
Millgram, Elijah, ed., 2001, Varieties of Practical Reasoning, Cambridge, MA: MIT Press
Tuomala, Matti, 1990, Optimal Income Tax and Redistribution, Oxford: Oxford University Press, pp. 4–5Google Scholar
Mirrlees, James, 2006, Welfare, Incentives, and Taxation, Oxford: Oxford University Press, pp. 131–173CrossRefGoogle Scholar
Gibbard, Allan, 2002, “Normative Explanations: Invoking Rationality to Explain Happenings,” in Bermudez, Jose Luis and Millar, Alan, eds., Reason and Nature: Essays in the Theory of Rationality, Oxford: Oxford University Press, pp. 265–282Google Scholar
Kitcher, Philip, 2001, Science, Truth, and Democracy, New York: Oxford University Press, pp. 117–135CrossRefGoogle Scholar

Save book to Kindle

To save this book to your Kindle, first ensure is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the or variations. ‘’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats