Neither an angel nor an ant: Emotion as an aid to bounded rationality

The role of emotion as a source of bounded rationality has been largely ignored. Following Herbert Simon, economists as well as psychologists have mainly focused on cognitive constraints while neglecting to integrate the growing body of research on emotion which indicates that reason and emotion are interconnected. Accordingly, the present paper aims to bridge the existing gap. By establishing a link between the two domains of research, emotion and bounded rationality, it will be suggested that emotions work together with rational thinking in two distinct ways, and thereby function as an additional source of bounded rationality. The aim, therefore, is not to offer an alternative to bounded rationality; rather, the purpose is to elaborate and supplement themes emerging out of bounded rationality. (C) 2002 Elsevier Science B.V. All rights reserved.