Economics Bounded Rationality Questions
Bounded rationality influences the study of health economics by recognizing that individuals have limited cognitive abilities and information processing capabilities when making decisions related to their health. This concept acknowledges that individuals may not always make fully rational decisions due to constraints such as time, information, and cognitive limitations. In health economics, bounded rationality helps explain why individuals may not always make optimal choices regarding healthcare utilization, insurance coverage, or preventive behaviors. It highlights the importance of understanding the cognitive limitations of individuals and designing policies and interventions that account for these limitations to improve decision-making and overall health outcomes.