Bounded rationality refers to the idea that when making decisions, individuals are limited by the information they have, the cognitive limitations of their minds, and the time available to make a choice. This concept suggests that while people strive to make rational decisions, they often settle for a solution that is good enough rather than the optimal one due to these constraints. Bounded rationality emphasizes that decision-making occurs in an environment filled with uncertainty, where not all factors can be known or considered.
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