Economics Bounded Rationality Questions
Bounded rationality in economics refers to the concept that individuals and organizations make decisions based on limited information, cognitive abilities, and time constraints. It suggests that rationality is bounded or limited by these factors, leading to decision-making that may not always be optimal or fully rational. Instead, individuals and organizations often rely on heuristics, rules of thumb, and simplified models to make decisions in order to cope with the complexity of real-world situations.