❄️Systems Thinking: On Bounded Rationality (Quotes)

"The principle of bounded rationality [is] the capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world - or even for a reasonable approximation to such objective rationality." (Herbert A Simon, "Administrative Behavior", 1947)

"The first consequence of the principle of bounded rationality is that the intended rationality of an actor requires him to construct a simplified model of the real situation in order to deal with it. He behaves rationally with respect to this model, and such behavior is not even approximately optimal with respect to the real world. To predict his behavior we must understand the way in which this simplified model is constructed, and its construction will certainly be related to his psychological properties as a perceiving, thinking, and learning animal." (Herbert A Simon, "Models of Man", 1957)

[*]"A decision theory that rests on the assumptions that human cognitive capabilities are limited and that these limitations are adaptive with respect to the decision environments humans frequently encounter. Decision are thought to be made usually without elaborate calculations, but instead by using fast and frugal heuristics. These heuristics certainly have the advantage of speed and simplicity, but if they are well matched to a decision environment, they can even outperform maximizing calculations with respect to accuracy. The reason for this is that many decision environments are characterized by incomplete information and noise. The information we do have is usually structured in a specific way that clever heuristics can exploit." (E Ebenhoh, "Agent-Based Modelnig with Boundedly Rational Agents", 2007)

"Bounded rationality simultaneously constrains the complexity of our cognitive maps and our ability to use them to anticipate the system dynamics. Mental models in which the world is seen as a sequence of events and in which feedback, nonlinearity, time delays, and multiple consequences are lacking lead to poor performance when these elements of dynamic complexity are present. Dysfunction in complex systems can arise from the misperception of the feedback structure of the environment. But rich mental models that capture these sources of complexity cannot be used reliably to understand the dynamics. Dysfunction in complex systems can arise from faulty mental simulation-the misperception of feedback dynamics. These two different bounds on rationality must both be overcome for effective learning to occur. Perfect mental models without a simulation capability yield little insight; a calculus for reliable inferences about dynamics yields systematically erroneous results when applied to simplistic models." (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000) 

"Faced with the overwhelming complexity of the real world, time pressure, and limited cognitive capabilities, we are forced to fall back on rote procedures, habits, rules of thumb, and simple mental models to make decisions. Though we sometimes strive to make the best decisions we can, bounded rationality means we often systematically fall short, limiting our ability to learn from experience." (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000)

"The robustness of the misperceptions of feedback and the poor performance they cause are due to two basic and related deficiencies in our mental model. First, our cognitive maps of the causal structure of systems are vastly simplified compared to the complexity of the systems themselves. Second, we are unable to infer correctly the dynamics of all but the simplest causal maps. Both are direct consequences of bounded rationality, that is, the many limitations of attention, memory, recall, information processing capability, and time that constrain human decision making." (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000)

"Bounded rationality [...] is the rationality that takes into account the limitations of the decision maker in terms of information, cognitive capacity, and attention as opposed to substantive rationality, which is not limited to satisficing, but rather aims at fully optimized solutions." (Jean-Charles Pomerol & Frédéric Adam, "Understanding the Legacy of Herbert Simon to Decision Support Systems", 2008)

"You can’t navigate well in an interconnected, feedback-dominated world unless you take your eyes off short-term events and look for long term behavior and structure; unless you are aware of false boundaries and bounded rationality; unless you take into account limiting factors, nonlinearities and delays." (Donella H Meadow, "Thinking in Systems: A Primer", 2008)

[*] "Conceptual model that assumes individuals are intentionally rational, i.e. they try to maximize their decisions. However, this ideal model is almost impossible to apply in practice: actions and decisions are taken and performed by individuals whose knowledge of the alternatives and the consequences is incomplete; in addition, preferences are subject to change and are not always clearly orderable." (Maddalena Sorrentino & Marco De Marco, "Developing an Interdisciplinary Approach to the Evaluation of E-Government Implementation", 2009)

[*] "The assumption that agents have limited ability to acquire and process information and to solve complex economic problems. These limitations imply that expectations can diverge from RE [Rational Expectationa]." (Sebastiano Manzan, Agent Based Modeling in Finance", 2009)

[*] "Refers to the difficulties faced by an individual in obtaining, memorizing, and processing information in an actionable manner. Although he/she may want to act rationally, the individual can only do so in a limited way, without being able to take into account all desirable information or all possible options. This limited way consists in acting on the basis of knowledge that is deemed acceptable and sufficient, rather than complete knowledge, and of simple rules, rather than a comprehensive method; and in taking shortcuts whenever possible." (Humbert Lesca & Nicolas Lesca, "Weak Signals for Strategic Intelligence: Anticipation Tool for Managers", 2011)

[*] "The theory that personal rationality is bounded by our ability to process information, our cognitive limitations, and the finite time we have to make a decision. Although our decisions are still rational, they are rational within these constraints and, therefore, may not always appear to be rational or optimal." (Evan Stubbs, "Delivering Business Analytics: Practical Guidelines for Best Practice", 2013)

[*] "The principle that the rationality of human beings is constrained ('bounded') by the limits of their cognition and capacity to process information." (Robert M Grant, "Contemporary Strategy Analysis" 10th Ed., 2018)

[*] "A situation in which people have a limited capacity to anticipate, solve complex problems, or enumerate all options." (Jeffrey M Perloff & James A Brander, "Managerial Economics and Strategy" 2nd Ed., 2016)

[*] "A concept that explains behavior that diverges from the standard assumption of a fully rational economic agent. It occurs due to limitations of cognitive ability and access to information for decision making." (Ashlesha Khedekar-Swaminathan, "Behavioral Strategies to Achieve Financial Stability in Uncertain Times", 2019)

"Bounded rationality means rationality within limits or bounds set by incomplete information, cognitive limitations of mind and limited time available for taking the decision." (Anubhuti Dwivedi, "Peace in Economic Equilibrium: A Micro-Perspective", 2019)

[*] "Paradigm that explains agents’ strategic decision-making based on the imperfect information available to them and the expectations they have that dictate whether they will view the results as satisfactory. It leads on to the idea of adaptive learning and trial-and-error processes." (César Camisón, "Neurostrategy", 2021)

[*] "The idea that decision making deviates from rationality due to such inherently human factors as limitations in cognitive capacity and willpower, and situational constraints." (Shaun Ruysenaar, "Thinking Critically About the Fourth Industrial Revolution as a Wicked Problem", 2021)

🏷️Knowledge Representation: On Cognitive Maps (Quotes)

"[...] we believe that in the course of learning something like a field map of the environment gets established in the rat's brain [...] and it is this tentative map, indicating routes and paths and environmental relationships, which finally determines what responses, if any, the animal will finally release." (Edward C Tolman, "Cognitive maps in rats and men", Psychological Review 55(4), 1948)

"[…] learning consists not in stimulus-response connections but in the building up in the nervous system of sets which function like cognitive maps […] such cognitive maps may be usefully characterized as varying from a narrow strip variety to a broader comprehensive variety." (Edward C Tolman, "Cognitive maps in rats and men", Psychological Review 55(4), 1948)

"The cognitive map is a construct that has been proposed to explain how individuals know their environment. It assumes that people store information about their environment in a simplified form and in relation to other information they already have. It further assumes that this information is coded in a structure which people carry around in their heads, and that this structure corresponds, at least to a reasonable degree, to the environment it represents. It is as if an individual carried a map or model of the environment in his head." (Stephen Kaplan, "Cognitive maps, human needs and the designed environment", Environmental design research vol. 1, 1973)

"A person is changed by the contingencies of reinforcement under which he behaves; he does not store the contingencies. In particular, he does not store copies of the stimuli which have played a part in the contingencies. There are no 'iconic representations' in his mind; there are no 'data structures stored in his memory'; he has no 'cognitive map' of the world in which he has lived. He has simply been changed in such a way that stimuli now control particular kinds of perceptual behavior." (Burrhus F Skinner, "About behaviorism", 1974)

"A cognitive map is a specific way of representing a person's assertions about some limited domain, such as a policy problem. It is designed to capture the structure of the person's causal assertions and to generate the consequences that follow front this structure. […]  a person might use his cognitive map to derive explanations of the past, make predictions for the future, and choose policies in the present." (Robert M Axelrod, "Structure of Decision: The cognitive maps of political elites", 1976)

"The cognitive mapping approach promises to be more helpful to the decision maker for two reasons. First, since the advice can be expressed in terms of the person's own cognitive map, it can be solidly based in his own experience, using his own concepts, his own causal beliefs. and his own values. Equally important, when the cognitive map approach offers advice, it takes explicit account of the finite capacities of people and the way in which they simplify their images when dealing with a complex policy issue. Thus, with the cognitive mapping approach, a better understanding of how decisions are made can lead to the making of better decisions." (Robert M Axelrod, "Structure of Decision: The cognitive maps of political elites", 1976)

"Briefly, a cognitive map would consist of two major systems, a place system and a misplace system. The first is a memory system which contains information about places in the organism's environment, their spatial relations, and the existence of specific objects in specific places. The second, misplace, system signals changes in a particular place, involving either the presence of a new object or the absence of an old one. The place system permits an animal to locate itself in a familiar environment without reference to any specific sensory input, to go from one place to another independent of particular inputs (cues) or outputs (responses), and to link together conceptually parts of an environment which have never been experienced at the same time. The misplace system is primarily responsible for exploration, a species-typical behaviour which functions to build maps of new environments and to incorporate new information into existing maps." (John O'Keefe & Lynn Nadel, "The Hippocampus as a Cognitive Map", 1978)

"The cognitive map is not a picture or image which 'looks like' what it represents; rather, it is an information structure from which map-like images can be reconstructed and from which behaviour dependent upon place information can be generated." (John O'Keefe & Lynn Nadel, "The Hippocampus as a Cognitive Map", 1978)

"We would agree that organisms do not 'see' absolute space; cognitive maps are not pictures of the universe, they are schemata from which any portion of space can be constructed. The fact that we cannot perceive unified space does not mean we cannot conceive it; the latter potentiality derives from the possession of a structure which can be used to construct spaces that stretch endlessly in all dimensions." (John O'Keefe & Lynn Nadel, "The Hippocampus as a Cognitive Map", 1978)

"[...] cognitive maps can be seen as a picture or visual aid in comprehending the mappers' understanding of particular, and selective, elements of the thoughts (rather than thinking) of an individual, group or organization. They may also be seen as a representation that is amenable to analysis by both the mapper and others." (Colin Eden, "One the nature of cognitive maps", Journal of Management Studies 29 (3), 1992)

"Bounded rationality simultaneously constrains the complexity of our cognitive maps and our ability to use them to anticipate the system dynamics. Mental models in which the world is seen as a sequence of events and in which feedback, nonlinearity, time delays, and multiple consequences are lacking lead to poor performance when these elements of dynamic complexity are present. Dysfunction in complex systems can arise from the misperception of the feedback structure of the environment. But rich mental models that capture these sources of complexity cannot be used reliably to understand the dynamics. Dysfunction in complex systems can arise from faulty mental simulation - the misperception of feedback dynamics. These two different bounds on rationality must both be overcome for effective learning to occur. Perfect mental models without a simulation capability yield little insight; a calculus for reliable inferences about dynamics yields systematically erroneous results when applied to simplistic models." (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000)

"Even if our cognitive maps of causal structure were perfect, learning, especially double-loop learning, would still be difficult. To use a mental model to design a new strategy or organization we must make inferences about the consequences of decision rules that have never been tried and for which we have no data. To do so requires intuitive solution of high-order nonlinear differential equations, a task far exceeding human cognitive capabilities in all but the simplest systems."  (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000)

"The robustness of the misperceptions of feedback and the poor performance they cause are due to two basic and related deficiencies in our mental model. First, our cognitive maps of the causal structure of systems are vastly simplified compared to the complexity of the systems themselves. Second, we are unable to infer correctly the dynamics of all but the simplest causal maps. Both are direct consequences of bounded rationality, that is, the many limitations of attention, memory, recall, information processing capability, and time that constrain human decision making." (John D Sterman, "Business Dynamics: Systems thinking and modeling for a complex world", 2000)

"Eliciting and mapping the participant's mental models, while necessary, is far from sufficient [...] the result of the elicitation and mapping process is never more than a set of causal attributions, initial hypotheses about the structure of a system, which must then be tested. Simulation is the only practical way to test these models. The complexity of the cognitive maps produced in an elicitation workshop vastly exceeds our capacity to understand their implications. Qualitative maps are simply too ambiguous and too difficult to simulate mentally to provide much useful information on the adequacy of the model structure or guidance about the future development of the system or the effects of policies." (John D Sterman, "Learning in and about complex systems", Systems Thinking Vol. 3 2003)

[cognitive map:] "A mental representation of a portion of the physical environment and the relative locations of points within it." (Andrew M Colman, "A Dictionary of Psychology" 3rd Ed, 2008)

[cognitive map:] "A mental model (or map) of the external environment which may be constructed following exploratory behaviour." (Michael Allaby, "A Dictionary of Zoology" 3rd Ed., 2009)

"There is no reason to believe that cognitive maps are like iconic maps except, rather than being inscribed in the dirt, or on a rock, or imprinted on paper, they are somehow inscribed in neural tissue. They seem to be more like lists of significant places intertwined with bearings and headings between one place and another. The vital significance of these places is part and parcel of the map; the “map” is not a neutral spatial substrate to which vital significance is later attached. The space of cognitive maps is not merely about physical position; it is about needs and satisfiers, vantage points and opportunities for action." (William Benzon, "Maps, Iconic and Abstract", 2011)

[Cognitive Map:] "A representation of the conceptualization that the subject constructs of the system in which he evolves. The set of cognitive representations that emerge make it possible to understand his actions, the links between the factors structuring the cognitive patterns dictating his behaviors." (Henda E Karray & Souhaila Kammoun, "Strategic Orientation of the Managers of a Tunisian Family Group Before and After the Revolution", 2020)

♾️Cognitive Science: On Collective Intelligence (Quotes)

"We must therefore establish a form of decision-making in which voters need only ever pronounce on simple propositions, expressing their opinions only with a yes or a no. […] Clearly, if anyone’s vote was self-contradictory (intransitive), it would have to be discounted, and we should therefore establish a form of voting which makes such absurdities impossible." (Nicolas de Condorcet, "On the form of decisions made by plurality vote", 1788)

"Collective wisdom, alas, is no adequate substitute for the intelligence of individuals. Individuals who opposed received opinions have been the source of all progress, both moral and intellectual. They have been unpopular, as was natural." (Bertrand Russell, "Why I Am Not a Christian", 1927)

"The collective intelligence of any group of people who are thinking as a 'herd' rather than individually is no higher than the intelligence of the stupidest members." (Mary Day Winn, "Adam's Rib", 1931)

"Learning is a property of all living organisms. […] Since organized groups can be looked upon as living entities, they can be expected to exhibit learning […]" (Winfred B. Hirschmann, "Profit from the Learning Curve", Harvard Business Review, 1964)

"A cardinal principle in systems theory is that all parties that have a stake in a system should be represented in its management." (Malcolm S Knowles, "The Adult Learner", 1973)

"Collective intelligence emerges when a group of people work together effectively. Collective intelligence can be additive (each adds his or her part which together form the whole) or it can be synergetic, where the whole is greater than the sum of its parts." (Trudy and Peter Johnson-Lenz, "Groupware: Orchestrating the Emergence of Collective Intelligence", cca. 1980)

"Cybernetic information theory suggests the possibility of assuming that intelligence is a feature of any feedback system that manifests a capacity for learning." (Paul Hawken et al, "Seven Tomorrows", 1982)

"The concept of organizational learning refers to the capacity of organizational complexes to develop experiential knowledge, instincts, and 'feel' or intuition which are greater than the combined knowledge, skills and instincts of the individuals involved." (Don E. Kash, "Perpetual Innovation", 1989)

"We haven't worked on ways to develop a higher social intelligence […] We need this higher intelligence to operate socially or we're not going to survive. […] If we don't manage things socially, individual high intelligence is not going to make much difference. [...] Ordinary thought in society is incoherent - it is going in all sorts of directions, with thoughts conflicting and canceling each other out. But if people were to think together in a coherent way, it would have tremendous power." (David Bohm, "New Age Journal", 1989)

"Civilization is to groups what intelligence is to individuals. It is a means of combining the intelligence of many to achieve ongoing group adaptation. […] Civilization, like intelligence, may serve well, serve adequately, or fail to serve its adaptive function. When civilization fails to serve, it must disintegrate unless it is acted upon by unifying internal or external forces." (Octavia E Butler, "Parable of the Sower", 1993)

"Great leaders reinforce the idea that accomplishment in our society comes from great individual acts. We credit individuals for outcomes that required teams and communities to accomplish." (Peter Block, "Stewardship", 1993)

"We must learn to think together in an integrated, synergistic fashion, rather than in fragmented and competitive ways." (Joanna Macy, Noetic Sciences Bulletin, 1994-1995)

"The leading edge of growth of intelligence is at the cultural and societal level. It is like a mind that is struggling to wake up. This is necessary because the most difficult problems we face are now collective ones. They are caused by complex global interactions and are beyond the scope of individuals to understand and solve. Individual mind, with its isolated viewpoints and narrow interests, is no longer enough." (Jeff Wright, "Basic Beliefs", [email] 1995)

"It [collective intelligence] is a form of universally distributed intelligence, constantly enhanced, coordinated in real time, and resulting in the effective mobilization of skills. I'll add the following indispensable characteristic to this definition: The basis and goal of collective intelligence is mutual recognition and enrichment of individuals rather than the cult of fetishized or hypostatized communities." (Pierre Levy, "Collective Intelligence", 1999)

The three basic mechanisms of averaging, feedback and division of labor give us a first idea of a how a CMM [Collective Mental Map] can be developed in the most efficient way, that is, how a given number of individuals can achieve a maximum of collective problem-solving competence. A collective mental map is developed basically by superposing a number of individual mental maps. There must be sufficient diversity among these individual maps to cover an as large as possible domain, yet sufficient redundancy so that the overlap between maps is large enough to make the resulting graph fully connected, and so that each preference in the map is the superposition of a number of individual preferences that is large enough to cancel out individual fluctuations. The best way to quickly expand and improve the map and fill in gaps is to use a positive feedback that encourages individuals to use high preference paths discovered by others, yet is not so strong that it discourages the exploration of new paths." (Francis Heylighen, "Collective Intelligence and its Implementation on the Web", 1999)

"With the growing interest in complex adaptive systems, artificial life, swarms and simulated societies, the concept of “collective intelligence” is coming more and more to the fore. The basic idea is that a group of individuals (e. g. people, insects, robots, or software agents) can be smart in a way that none of its members is. Complex, apparently intelligent behavior may emerge from the synergy created by simple interactions between individuals that follow simple rules." (Francis Heylighen, "Collective Intelligence and its Implementation on the Web", 1999)

"Cultures are never merely intellectual constructs. They take form through the collective intelligence and memory, through a commonly held psychology and emotions, through spiritual and artistic communion." (Tariq Ramadan, "Islam and the Arab Awakening", 2012)

"[…] recent researchers in artificial intelligence and computational methods use the term swarm intelligence to name collective and distributed techniques of problem solving without centralized control or provision of a global model. […] the intelligence of the swarm is based fundamentally on communication. […] the member of the multitude do not have to become the same or renounce their creativity in order to communicate and cooperate with each other. They remain different in terms of race, sex, sexuality and so forth. We need to understand, then, is the collective intelligence that can emerge from the communication and cooperation of such varied multiplicity." (Antonio Negri, "Multitude: War and Democracy in the Age of Empire", 2004)

"Collective Intelligence (CI) is the capacity of human collectives to engage in intellectual cooperation in order to create, innovate, and invent." (Pierre Levy, "Toward a Self-referential Collective Intelligence", 2009)

"How is it that an ant colony can organize itself to carry out the complex tasks of food gathering and nest building and at the same time exhibit an enormous degree of resilience if disrupted and forced to adapt to changing situations? Natural systems are able not only to survive, but also to adapt and become better suited to their environment, in effect optimizing their behavior over time. They seemingly exhibit collective intelligence, or swarm intelligence as it is called, even without the existence of or the direction provided by a central authority." (Michael J North & Charles M Macal, "Managing Business Complexity: Discovering Strategic Solutions with Agent-Based Modeling and Simulation", 2007)

"By analyzing patterns in crowd behavior and honing methods of gauging fitness - or at least extricating it from popularity - the market can effectively use collective intelligence so that the cream always rises to the top." (Albert-László Barabási, "The Formula: The Universal Laws of Success", 2018)