Abstract: Humans use heuristics as simple decision rules in complex or intransparent situations, and such heuristics, when suitably adapted to the context, can be surprisingly efficient, and they often beat decision rules that utilize more information. Based on interviews conducted at an investment and a central bank, we have investigated the use of heuristics by highly skilled professionals in environments characterized by uncertainty in the Knighean sense. That uncertainty is strategic, depending on the actions of others. The heuristics reflect that, and we have analyzed the underlying logic in contexts of what we call reciprocal bounded rationality.
This talk will stream live from SFIs YouTube channel.