How to Choose What to Decide

Decision making in the rational choice domain requires the decision problem at hand to appear in closed form. Closed form here means that it is based on a well defined set of alternative courses of action (acts) to choose from that for their part are connected to well defined, probably uncertain payoffs. However, bounded rationality abandons this assumption by acknowledging that processing information is costly. As long as the agent is in the predecision-state, he has neither ascertained any payoffs to well defined actions nor has he specified different states of the nature. In other words, bounded rationality does (mostly) not assume real world decision problems to appear in closed form, but treats them as open. Consequently, in the bounded rationality domain the question of how to close a decision problem, i.e. transforming it from open to closed form, is an important one. By focussing real world’s complex richness to a single decision problem of interest we select a closed form decision problem, in other words: we choose what to decide.