Human rationality is bounded by memory and computational limits and often violates rational maxims

Evidence

The objections to the rationality assumption were primarily psychological. The human animal, it has been argued, is often controlled by emotions and desires that do not fit the model of calculating rationality. More recent objections to the maximization doctrine have been cognitive rather than motivational. Following the seminal work of Herbert Simon (1955, 1978) and the emer-gence of cognitive psychology, it has become evident that human rationality is bounded by limitations on memory and computational capabilities. Furthermore, the experimental analysis of inference and choice has revealed that the cognitive machinery underlying human judgment and decision making is often inconsistent with the maxims of rationality. — John T. Jost and Jim Sidanius, Political Psychology, 2408

Categorization

• XREF: Connects to Kahneman and Tversky’s prospect theory work on heuristics and biases, and Simon’s bounded rationality. — connects to: Human cognitive limits make simplifying concepts and calculating devices constitutive of complex markets. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1195; Economic performativity rests on human cognitive limits and mutual susceptibility — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1197; Market mechanisms sometimes amplify rather than correct human cognitive limitations — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1207 (+2 more)