Mousavi, S., Meder, B., Neth, H., & Kheirandish, R. (2017). Heuristics: Fast, frugal, and smart. In Morris Altman (Ed.), Handbook of behavioral economics and smart decision-making: Rational decision-making within the bounds of reason (pp. 101–118). Cheltenham, UK: Edward Elgar Publishing.
Recent years have seen important new explorations along the boundaries between economics and psychology.
For the economist, the immediate question about these developments is whether they include new advances in psychology that can fruitfully be applied to economics.
(H. A. Simon, 1959, p. 253)
From the introduction: Individuals often make smart decisions despite the inherent limitations of cognitive and material resources. Whereas mainstream economics has focused mainly on the allocation mechanisms of material resources by cognitively unbounded (fully rational) agents, behavioral economics aims to include allocation of cognitive resources by using the insights from the heuristics and biases program in psychology (Kahneman et al. 1982). In this chapter, we introduce another psychological program with a more optimistic perspective inspired by Simon’s view of bounded rationality and developed systematically in the study of fast-and-frugal heuristics (Gigerenzer et al., 1999).