The term ‘bounded rationality’ is used to designate rational choice that takes into account the cognitive limitations of the decision-maker — limitations of both knowledge and computational capacity. Bounded rationality is a central theme in the behavioural approach to economics, which is deeply concerned with the ways in which the actual decision–making process influences the decisions that are reached.
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© 1990 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Simon, H.A. (1990). Bounded Rationality. In: Eatwell, J., Milgate, M., Newman, P. (eds) Utility and Probability. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20568-4_5
Publisher Name: Palgrave Macmillan, London
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Online ISBN: 978-1-349-20568-4