Unbounding bounded rationality: heuristics as the logic of economic discovery

This paper builds on a long-lasting research program on the micro-foundations of innovative decision making, founded on a development of a neglected ‘epistemic’ aspect of Simon’s work, and on contributions in epistemology, in which ‘heuristics’ are not procedures that are uncertainty-avoiding, economizing on cognitive and search effort, and problem-space reducing, but procedures that are uncertainty-modeling, investing in research effort, and problem-expanding The paper offers a summary of the main effective heuristics of that kind so far identified, as applied to real processes of innovative decision making under epistemic uncertainty, such as judging and investing in novel entrepreneurial projects. Third, it argues and shows that, in contrast to the common view, a wide range of those procedures, usually thought to ‘belong’ to different and ‘rival’ models, can be fruitfully combined.