The core principle posits that neoclassical economic rationality is computationally impossible due to exponential complexity arising from the sheer number of commodity combinations in choice problems, contradicting axioms such as completeness and transitivity. This concept belongs to behavioral finance and computational economics, asserting that human decision-making relies on satisficing heuristics rather than optimization because optimal solutions exceed finite processing capacity within reasonable timeframes. Consequently, traditional models based on revealed preference theory fail under real-world constraints of limited attention and cognitive resources necessitating a redefinition of rationality as bounded or procedural efficiency.
The core principle posits that neoclassical economic rationality is computationally impossible due to exponential complexity arising from the sheer number of commodity combinations in choice problems…