Home > Term: bounded rationality
bounded rationality
A theory of human decision making that assumes that people behave rationally, but only within the limits of the information available to them. Because their information may be inadequate (bounded) they make take decisions that appear to be irrational according to traditional theories about homo economicus (economic man). (See also behavioral economics. )
- Part of Speech: noun
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
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- summer.l
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