Bounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal.
| FactSnippet No. 1,606,783 |
10 Facts About Bounded rationality
1.
2.
Therefore, bounded rationality can be said to address the discrepancy between the assumed perfect rationality of human behaviour, and the reality of human cognition.
| FactSnippet No. 1,606,784 |
3.
In short, bounded rationality revises notions of "perfect" rationality to account for the fact that perfectly rational decisions are often not feasible in practice because of the intractability of natural decision problems and the finite computational resources available for making them.
| FactSnippet No. 1,606,785 |
4.
The concept of bounded rationality continues to influence different disciplines, including political science, economics, psychology, law and cognitive science.
| FactSnippet No. 1,606,786 |
5.
Bounded rationality was coined by Herbert A Simon, where it was proposed as an alternative basis for the mathematical and neoclassical economic modelling of decision-making, as used in economics, political science, and related disciplines.
| FactSnippet No. 1,606,787 |
6.
Simon describes a number of dimensions along which "classical" models of Bounded rationality can be made somewhat more realistic, while remaining within the vein of fairly rigorous formalization.
| FactSnippet No. 1,606,788 |
7.
Model of bounded rationality extends to bounded self-interest, in which humans are sometimes willing to forsake their own self-interests for the benefits of others due to incomplete information that the individuals have at the time being.
| FactSnippet No. 1,606,789 |
8.
In contrast to the work of Simon; Kahneman and Tversky aimed to focus on the effects bounded rationality had on simple tasks which therefore placed more emphasis on errors in cognitive mechanisms irrespective of the situation.
| FactSnippet No. 1,606,790 |
9.
Bounded rationality is shown to be useful in negotiation techniques as shown in research undertaken by Dehai et al.
| FactSnippet No. 1,606,791 |
10.
Since scale-free networks are ubiquitous in social systems, the link between bounded rationality distributions and social structure is an important one in explaining social phenomena.
| FactSnippet No. 1,606,792 |