Ralph Hertwig and Stefan M. Herzog

Homo economicus cannot help but be puzzled by people's baffling array of social behaviors that conflict with economic theory. To accommodate these “deviant” behaviors within the standard view of rationality, defined in terms of probability theory, logic and rational choice theory, economists and psychologists tend to inject some psychology into the rational choice framework. In contrast, we propose to start afresh: We put forth the thesis that humans' social intelligence is not qualitatively different from their nonsocial intelligence, and that important aspects of both kinds of intelligence can be modeled in terms of boundedly rational fast and frugal heuristics. These heuristics can be ecologically and socially rational in that they exploit the structure of physical and social environments as well as evolved capacities to foster performance both in games against nature and in social games.