Bounded Rationality


Definition: Bounded Rationality is the concept of human behavior in decision making, coined by Simon, that rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.
It contrasts the idea of rational and logical decision making.


More on individual decision making: Anchoring Bias, Bayesian Theory, Black Swan Theory, Cognitive Bias, Cognitive Dissonance, more...


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