Bounded rationality in decision-making

How cognitive shortcuts and professional values may interfere with market-based regulation

By Helle Nielsen

Bounded rationality in decision-making
Hardcover -
  • Price: £85.00
  • ISBN: 9780719079924
  • Publish Date: Apr 2010
  • Publisher: Manchester University Press
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    Book Information


    Challenging standard economic models, this book shows how farmers tend to use cognitive shortcuts in their decision-making and how their professional pride frequently outweighs profit considerations. This indicates that environmental regulation based on economic incentives may not be as effective as economic theorists and ex ante policy analysts maintain.

    Rather than assuming that regulations respond to incentive-based policies, this book examines the ways in which they do. Bounded rationality in decision-making has typically been studied in a laboratory setting, but this book uses original empirical research to demonstrate how bounded rationality plays out in the real world, examining the responses of Danish farmers to fertiliser regulation and their decision-making processes.

    The book will be of interest to a broad range of scholars within the fields of public policy, public administration, political science, behavioural economics and sociology.


    1. Introduction
    2. Theoretical approaches to rational behaviour
    3. A positive model of bounded rationality: From theoretical approaches to analytical model
    4. Research design
    5. The empirical setting - agriculture and environmental regulation
    6. Fertiliser application around optimal norms: effect of decision environment
    7. Information shortcuts and rules of thumb: How farmers make decisions on fertilisers
    8. Optimising or satisficing: when and what
    9. Conclusion: Money also matters
    Appendix: List of features of the farmers interviewed for the qualitative analysis


    Helle Nielsen is a Social Scientist in policy analysis at the National Environmental Research Institute, Aarhus University

    Bounded rationality in decision-making

    By Helle Nielsen

    Hardcover £85.00 / $130.00

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