Bounded rationality is a less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable or cannot be fully processed.

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According to Simon's bounded rationality,decision makers cannot be truly rational because (1)they have imperfect,incomplete information about alternatives and consequences;(2)the problems they face are so complex;(3)human beings simply cannot process all the information to which they are exposed;(4)there is not enough time to process all relevant information fully;and (5)people,including managers within the same firm,have conflicting goals.

Bounded Rationality Is a Less-Than-Perfect Form of Rationality in Which