ABSTRACT
Herbert Simon presented his view of the bounded nature of human rationality in contrast to neoclassical economics’ notion of substantive rationality that is fixated on outcomes and oblivious to procedures. He invited economists to leave the comfort of deduction-based theorizing in their armchairs and glimpse the many ways in which actual human behavior defies the calculus of benefits and costs. Early Simonian cognitive-based notions built ports of departure from the deductive economics methodology of rational choice theory. Economists have since expanded their modeling and theorizing domain well beyond their armchairs in many directions that feature as descriptors and prefixes for economics, such as evolutionary, cognitive, behavioral, socio-, neuro-, bio-, and more. Adoption of procedural rationality notions from other fields has effectively customized bounded rationality in the economists’ arsenal. This chapter recounts the decades-long efforts of formalizing observed (boundedly rational) choice behavior processes in terms and as a result of extensions of rational choice theory, a development it is proposed to call procedural economics.
