Economics Bounded Rationality Questions
The role of information in bounded rationality is to provide individuals with the necessary knowledge and data to make decisions within the limits of their cognitive abilities. In bounded rationality, individuals are assumed to have limited information-processing capabilities and therefore rely on simplified decision-making strategies. Information helps individuals in understanding the available options, evaluating the potential outcomes, and selecting the most satisfactory choice given their cognitive constraints. It allows individuals to make decisions that are "good enough" rather than optimal, considering the constraints of time, cognitive capacity, and available information.