<Li> Limited cognitive ability: identifying and weighing each alternative against every other may take time, effort, and mental capacity . Recognising the cost that these impose or cognitive limitations of individuals gives rise to theories of bounded rationality . </Li> <P> Alternative theories of human action include such components as Amos Tversky and Daniel Kahneman's prospect theory, which reflects the empirical finding that, contrary to standard preferences assumed under neoclassical economics, individuals attach extra value to items that they already own compared to similar items owned by others . Under standard preferences, the amount that an individual is willing to pay for an item (such as a drinking mug) is assumed to equal the amount he or she is willing to be paid in order to part with it . In experiments, the latter price is sometimes significantly higher than the former (but see Plott and Zeiler 2005, Plott and Zeiler 2007 and Klass and Zeiler, 2013). Tversky and Kahneman do not characterize loss aversion as irrational . Behavioral economics includes a large number of other amendments to its picture of human behavior that go against neoclassical assumptions . </P> <P> Often preferences are described by their utility function or payoff function . This is an ordinal number an individual assigns over the available actions, such as: </P> <Dl> <Dd> u (a i)> u (a j) (\ displaystyle u \ left (a_ (i) \ right)> u \ left (a_ (j) \ right)) </Dd> </Dl>

Who came up with the rational choice theory