Organization Design
Bounded rationality refers to the concept that individuals make decisions based on limited information, cognitive limitations, and the finite amount of time they have to make a choice. This means that rather than seeking the optimal solution, people often settle for a satisfactory one, influenced by the constraints of their environment and their own mental capacities. Understanding bounded rationality is essential for recognizing how decisions are made in both individual and group contexts, and it highlights the differences between theoretical models of decision-making and actual human behavior.
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