According to bounded rationality theory, people make better decisions when their perceptions are "bounded" or framed by past experience.

Question

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Bounded rationality theory suggests that individuals make decisions with limited information, time, and cognitive processing ability, rather than making better decisions when their perceptions are framed by past experience. It highlights the constraints on human decision-making rather than the enhancement of decision quality through experience.

According to Bounded Rationality Theory, People Make Better Decisions When