 
Summary: BOUNDED RATIONALITY: MODELS FOR SOME FAST AND FRUGAL
HEURISTICS
HORACIO ARL ŽO COSTA AND ARTHUR PAUL PEDERSEN
ABSTRACT. We generalize two versions of Gerd Gigerenzer's Take The Best algorithm to
the case of nonbinary choice and we study choice functions that completely characterize
the algorithm. One of the versions of the algorithm allows for failures of transitivity and
acyclicity of the preference relation induced by the algorithm. So, the corresponding choice
function has a descriptive interpretation (it violates the usual constraint that choices over
nonempty sets yield nonempty outputs).
1. INTRODUCTION
Herb Simon pioneered the study of bounded models of rationality. Simon famously
argued that decision makers typically satisfice rather than optimize. According to Simon,
a decision maker normally chooses an alternative that meets or exceeds specified criteria,
even when this alternative is not guaranteed to be unique or in any sense optimal. For
example, Simon argued that an organisminstead of scanning all the possible alternatives,
computing each probability of every outcome of each alternative, calculating the utility
of each alternative, and thereupon selecting the optimal option with respect to expected
utilitytypically chooses the first option that satisfies its `aspiration level.'
Simon insisted that real minds are adapted to realworld environments. Simon writes,
"Human rational behavior is shaped by a scissors whose two blades are the structure of
