Economics Bounded Rationality Questions
Bounded rationality in economics refers to the idea that individuals and organizations make decisions based on limited information, cognitive limitations, and time constraints. It recognizes that decision-makers cannot always gather and process all available information, leading to the use of simplified decision-making strategies or heuristics.
In organizational psychology, bounded rationality refers to the understanding that individuals within organizations also face cognitive limitations and constraints when making decisions. It recognizes that organizational decision-making is influenced by factors such as limited information, time pressure, and cognitive biases.
Therefore, bounded rationality in economics and bounded rationality in organizational psychology both acknowledge the limitations and constraints that individuals and organizations face when making decisions, emphasizing the importance of understanding and accounting for these factors in decision-making processes.