Rational choice and the structure of the environment.

A comparative examination of the models of adaptive behavior employed in psychology and economics shows that in almost all respects the latter postulate a much greater complexity in the choice mechanisms, and a much larger capacity in the organism for obtaining information and performing computations than do the former.

Abstract

A growing interest in decision making in psychology is evidenced by the recent publication of Edwards ’ review article in the Psychological Bulletin(1) and the Santa Monica Conference volume, Decision Processes (7). In this work, much attention has been focused on the characterization of rational choice, and because the latter topic has been a central concern in economics, the theory of decision making has become a natural meeting ground for psycho-logical and economic theory. A comparative examination of the models of adaptive behavior employed in psychology (e.g., learning theories), and of the models of rational behavior employed in economics, shows that in almost all respects the latter postulate a much greater complexity in the choice mechanisms, and a much larger capacity in the organism for obtaining information and performing computations, than do the former. Moreover, in the limited range of situations where the predictions of the two theories have been compared (see [7, Ch. 9, 10, 18]), the learn-ing theories appear to account for the observed behavior rather better than do the theories of rational behavior. Both from these scanty data and from an examination of the postulates of the