Bounded rationality means:
A) we never have perfect knowledge and hence can never be perfectly rational
B) we are irrational by nature
C) we cannot be rational because we are forgetful
D) gaining advantage by being economical with, or even distorting, what we take to be the truth

Question

Quizplus · Accepted Answer

Bounded rationality is the idea that humans have cognitive limitations in their decision making and problem solving abilities. It recognizes that while humans strive to make rational decisions, their abilities to process information and calculate outcomes are limited by factors such as time, knowledge, and cognitive resources. Therefore, while humans can make rational decisions within the bounds of their limitations, they can never be perfectly rational due to their cognitive constraints.

Bounded Rationality Means