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bounded rationality

bounded rationality

A Dictionary of Business and Management | 2006 | Copyright

bounded rationality The type of rationality that most people (or organizations) resort to when faced with complex decisions in fast-moving, real-life situations where perfect information is unavailable. Given these constraints, decision makers will be content to find an alternative that gives satisfactory profits rather than one that maximizes profits. The concept of bounded rationality is thus a corrective to the assumption of many economic theories that economic agents make ideally rational decisions to optimize their self-interest. See satisficing behaviour.
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"bounded rationality." A Dictionary of Business and Management. 2006. Encyclopedia.com. 31 May. 2012 <http://www.encyclopedia.com>.

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bounded rationality

A Dictionary of Sociology | 1998 | | Copyright

bounded rationality According to the rational exchange postulates associated with the organizational theory of Herbert A. Simon (see Models of Bounded Rationality, 1982
), there are cognitive limits to the ability of people to pursue wholly rational purposeful behaviour. Rather than seek the optimal solution, actors satisfice; that is, they accept a solution which is ‘good enough’, within a so-called zone of indifference.
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GORDON MARSHALL. "bounded rationality." A Dictionary of Sociology. 1998. Encyclopedia.com. 31 May. 2012 <http://www.encyclopedia.com>.

GORDON MARSHALL. "bounded rationality." A Dictionary of Sociology. 1998. Encyclopedia.com. (May 31, 2012). http://www.encyclopedia.com/doc/1O88-boundedrationality.html

GORDON MARSHALL. "bounded rationality." A Dictionary of Sociology. 1998. Retrieved May 31, 2012 from Encyclopedia.com: http://www.encyclopedia.com/doc/1O88-boundedrationality.html

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