Defining models of bounded rationality as those in which elements of the process of choice are explicitly embedded, this book focuses on the challenges of bounded rationality rather than the economic implications. It discusses the modelling of procedural rationality and problems of modelling.

The notion of bounded rationality was initiated in the 1950's by Herbert Simon. In this book the author defines models of bounded rationality as those in which elements of the process of choice are explicitly embedded. The book focuses on the challenges of modelling bounded rationality, rather than on substantial economic implications. In the first part of the book the author considers the modelling of choice. After discussing some psychological findings, he proceeds to the modelling of procedural rationality, knowledge, memory, the choice of what to know and group decisions. In the second part, he discusses the fundamental difficulties of modelling bounded rationality in games. He begins with the modelling of a game with procedural rational players and then surveys repeated games with complexity considerations. He ends with a discussion of computability constraints in games. The final chapter includes a critique by Herbert Simon of the author's methodology and the author's response.

Part 1 Introduction: "modelling" and "bounded rationality"
the aim of this book
the state of the art
a personal note
bibliographic notes. Part 2 Bounded rationality in choice: the "rational man"
the traditional economist's position
the attack on the traditional approach
experimental evidence
comments
bibliographic notes
projects. Part 3 Modelling procedural decision making: motivation
preparing the tools - similarity relations
a procedure of choice between vectors
analysis
case-based theory
bibliographic notes
projects. Part 4 Modelling knowledge: knowledge and bounded rationality
information structure
the set-theoretical definition of knowledge
Kripke's model
the impact of the timing of decisions and having more information
on the possibility of speculative trade
bibliographic notes
projects. Part 5 Modelling limited memory: imperfect recall
an extensive decision making model with imperfect information
perfect and imperfect recall
time consistency
the role of randomization
the multiselves approach
on the problematics of using the model
bibliographic notes
projects. Part 6 Choosing what to know: optimal information structures
what is "high" and what is "low"?
manipulating informational restrictions
perceptrons
bibliographic notes
projects. Part 7 Modelling complexity in group decisions: introduction
the model of a team
processing information
aggregating preferences
bibliographic notes
projects. Part 8 Modelling bounded rationality in games: introduction
interaction between Luce players
a game with procedural rational players
limited foresight in extensive games
bibliographic notes
projects. Part 9 Complexity considerations in repeated games: introduction
the model of repeated games - a brief review
strategies as machines in infinitely repeated games
complexity considerations in repeated games
the structure of machine games equilibria
repeated extensive games
concluding remarks
bibliographic notes
projects. Part 10 Attempting to resolve the finite horizon paradoxes: motivation
implementation of strategies by machines
counting is costly
bounded capability to count
machines also send messages
the e-equilibrium approach - a deviation is costly
conclusion
bibliographic notes
projects. Part 11 Computability constraints in games: introduction
informal results on computability
is there a rational player?
Turing machine game
bibliographic notes
projects. Part 12 Final thoughts: Simon's critique
response.