Editing Bounded rationality (section)

== In psychology ==
The collaborative works of [[Daniel Kahneman]] and [[Amos Tversky]] expand upon Herbert A. Simon's ideas in the attempt to create a map of bounded rationality. The research attempted to explore the choices made by what was assumed as rational agents compared to the choices made by individuals optimal beliefs and their [[satisficing]] behaviour.<ref name=":1">{{Cite journal|last=Kahneman|first=Daniel|date=2003|title=Maps of Bounded Rationality: Psychology for Behavioral Economics|url=https://www.jstor.org/stable/3132137|journal=The American Economic Review|volume=93|issue=5|pages=1449–1475|doi=10.1257/000282803322655392|jstor=3132137|s2cid=15131441 |issn=0002-8282}}</ref> Kahneman cites that the research contributes mainly to the school of psychology due to imprecision of psychological research to fit the formal economic models; however, the theories are useful to economic theory as a way to expand simple and precise models and cover diverse psychological phenomena.<ref name=":1" /> Three major topics covered by the works of Daniel Kahneman and Amos Tversky include heuristics of judgement, risky choice, and [[Framing effect (psychology)|framing effect]], which were a culmination of research that fit under what was defined by Herbert A. Simon as the psychology of bounded rationality.<ref>{{Cite journal|last=Kahneman|first=Daniel|date=2003|title=A perspective on judgment and choice: Mapping bounded rationality.|url=http://dx.doi.org/10.1037/0003-066x.58.9.697|journal=American Psychologist|volume=58|issue=9|pages=697–720|doi=10.1037/0003-066x.58.9.697|pmid=14584987|s2cid=16994141 |issn=1935-990X}}</ref> In contrast to the work of Simon; Kahneman and Tversky aimed to focus on the effects bounded rationality had on simple tasks which therefore placed more emphasis on errors in cognitive mechanisms irrespective of the situation.<ref name=":2" /> The study undertaken by Kahneman found that emotions and the psychology of economic decisions play a larger role in the economics field than originally thought. The study focused on the emotions behind decision making such as fear and personal likes and dislikes and found these to be significant factors in economic decision making.<ref name=":1" />

Bounded rationality is also shown to be useful in negotiation techniques as shown in research undertaken by Dehai et al. that negotiations done using bounded rationality techniques by labourers and companies when negotiating a higher wage for workers were able to find an equal solution for both parties.<ref>Dehai, L., Wei, L., Hongyi, L., & Jiafu, T. (2017). Bargaining Model of Labour Disputes Considering Social Mediation and Bounded Rationality. European journal of Operational Research, 262(3), 1064-1071. https://doi.org/10.1016/j.ejor.2017.04.003</ref>