ESCP Europe

This paper sketches important concepts of rationality. It concentrates on bounded rationality and provides descriptions of the heuristics and bias program and of the fast and frugal heuristics program by Gerd Gigerenzer and colleagues (Gigerenzer, 2002; Gigerenzer, Todd, & the ABC Research Group, 1999; Todd & Gigerenzer, 2000). One objective is to link the underlying concept of ecological rationality in judgment and decision making with the field of management research. This area has been mostly dominated with ideas of the heuristics and biases program coined by Daniel Kahneman and Amos Tversky (2000), with an emphasis of irrationality and lapses of peoples judgments and decisions. After an overview of the historic development in this debate on rationality, this paper presents a sketch of the fast and frugal heuristic program as well as short impressions from two management disciplines in order to illustrate the fruitfulness. The paper concludes with the description of dual-process models as a potentially unifying approach of both programs and their promising research potential.