Concept of bounded rationality

Bounded rationality is the idea that, while individuals aim to make rational decisions, their ability to do so is limited by the amount of information they have, their cognitive abilities, and the time available. Instead of always seeking the perfect choice, people often settle for a solution that is good enough, known as "satisficing." This concept recognizes that real-world decision-making involves constraints that prevent achieving absolute rationality, leading individuals to use simplified strategies to make manageable, effective choices under limitations.