Bounded rationality states that:

Question

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Bounded rationality acknowledges the limitations of decision-making processes, including incomplete knowledge, limited cognitive processing capacity, and finite time available to make decisions. Thus, it implies that while individuals strive for rationality, their rationality is bounded by these constraints. This concept encompasses the ideas that rationality requires understanding the consequences of choices (A), imagination compensates for the lack of experience (B), and rationality involves choosing among alternatives (C), all within the context of these limitations.

Bounded Rationality States That