The concept of bounded rationality refers to:
A) A utility function that cannot be fully described.
B) Individuals unable to use "rule-of-thumbs" to make decisions.
C) Only individuals who have been well-trained in economics can make the optimal decisions.
D) Limits on cognitive abilities, access to information and limits on other necessary resources keep individuals from achieving utility maximization.

Question

Quizplus · Accepted Answer

Bounded rationality acknowledges the limitations on cognitive abilities, information access, and resources that prevent individuals from achieving perfect utility maximization, as opposed to the idealized fully rational decision-maker assumed in classical economic theory.

The Concept of Bounded Rationality Refers To