The theory that most people are only partly rational, and are irrational in the remaining part of their actions.
Human rationality is limited when making decisions by the following factors:
- Difficulty of the problem
- Cognitive capability of the mind
- Time available to make the decision
Bounded rationality was coined by Herbert A. Simon. In Models of Man, Simon argues that most people are only partly rational, and are irrational in the remaining part of their actions.
Satisficing is the decision-making strategy or cognitive heuristic (
"Decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world. Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science" – Herbert Simon
Many people believe they’re fully rational and often don’t realize that
- Unconscious factors can be easier to manipulate
- Personal belief systems can alter decision making in non-beneficial ways