Economics Bounded Rationality Questions
Bounded rationality impacts the study of neuroeconomics by recognizing that individuals have limited cognitive abilities and information processing capacities. This means that individuals may not always make fully rational decisions and instead rely on heuristics or simplified decision-making strategies. In the context of neuroeconomics, bounded rationality suggests that the brain's decision-making processes are influenced by these cognitive limitations, leading to deviations from traditional economic models of rational behavior. Neuroeconomics seeks to understand how the brain's neural mechanisms interact with bounded rationality to shape economic decision-making.