Bounded rationality, mental costs and economic order

Author: Qing Zhiqiong
Publisher:
Publish Date: 2006-04-01
Features: This work has a strong theoretical logical structure and emphasizes the combination of theory and practice. However, the author needs to further explore the following issues: the rational selection mechanism of cognitive structures; the empirical testing and measurement of mental costs; the definition of mental/cognitive resources; the possibility of integrating transaction costs and mental costs; the regularity of mental costs in the process of human social development; case studies on government failure and cognitive biases in transition orders; and so on.
This book first reviews and summarizes the research on bounded rationality and order by economists. By critiquing the two implicit assumptions of the neoclassical economic man, it proposes the hypothesis of positive thinking costs and "individual heterogeneity," explaining our understanding of the economic man. Then, the book focuses on the paradigm of thinking costs. Starting from bounded rationality and thinking costs, it explains why order exists and demonstrates that order is a mechanism for reducing uncertainty and complexity, simplifying information, and lowering mental costs. The book examines the different mental costs and the ability to extend individual rationality under given benefits for organizational order, planned order, and market order.