Economics Bounded Rationality Questions
Bounded rationality in entrepreneurship refers to the idea that entrepreneurs make decisions based on limited information and cognitive abilities. It recognizes that entrepreneurs face constraints in terms of time, resources, and information, which affect their decision-making process. Bounded rationality acknowledges that entrepreneurs cannot always make perfectly rational decisions due to these limitations. Instead, they rely on heuristics, intuition, and past experiences to make decisions that are satisfactory or "good enough" given the circumstances. This concept highlights the importance of understanding the cognitive limitations of entrepreneurs and the impact it has on their decision-making in the entrepreneurial context.