Optimization Under Constraints

Other theories recognized the constraints of information search to support decision-making. Whether the search was internal through one's memory or whether the search was in the external environment by seeking knowledge from experts, friends, libraries or other sources--it takes time! Therefore, there must be realistic stopping rules for when sufficient search has been done, and one must get on with making the decision.*

The stopping rule for Optimization Under Constraints decision theory was to stop search when the costs of searching outweighed the benefits. Costs include time expenditure, money, or any other resources. The flaw in this theory is that Unbounded Rationality again seeps in with the assumption that humans have unlimited time, knowledge, and computational power with which to compute the cost benefits at each step in information search. This is not how humans actually make decisions.*

*Gigerenzer, G., Todd, P.M., Simple Heuristics That Make Us Smart, Oxford University Press, 1999.