bounded rationality

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Bounded Rationality

The theory that humans attempt to make rational decisions, but their ability to do so is limited by knowledge, ability to know, inadequate time to consider and other factors. Bounded rationality may explain situations like panic buying, in which investors continue to buy a security long after it ceases to be rational to do so. Investors may believe the price for the security may continue to rise and may not believe they have enough time to find out for certain. Bounded rationality claims people aim for rationality but cannot be reasonable all the time. See also: Behavioral economics.

bounded rationality

limits on the capabilities of people to deal with complexity, process information and pursue rational aims. Bounded rationality prevents parties to a CONTRACT from contemplating or enumerating every contingency that might arise during a TRANSACTION, so preventing them from writing complete contracts.
References in periodicals archive ?
But the problem with programming the future, as opposed to planning for it, is that programming is an attempt to eliminate human judgment, to bring the future into the present by means of hyperrationality, as we bring the past into the present by means of hyperreality.
As these examples suggest, however, there is a problem with our hyperrationality.
In an age that has reacted very negatively against what it regards as the hyperrationality of neo-Scholastic discourse, it is not unusual to hear the exhortation that theology must be sapiential, that it must be oriented toward wisdom.
Directly associated to this idea of humility is ecopoetry's third characteristic: "an intense skepticism concerning hyperrationality, that usually leads to an indictment of an overtechnologized modern world and a warning concerning the very real potential for ecological catastrophe" (6) "God's Grandeur" investigates this potential by portraying a natural world rejected by a mankind too concerned with its own devices.
I begin the analysis with some highly unrealistic assumptions about the hyperrationality of savers and then relax them after the mechanics of the model are clear.
The hyperrationality assumption means that individuals with Social Security accounts or who own shares in businesses take fully into account the saving carried out in their name when they make their decisions about how much of their personal income they will save.
Jamieson 1988) have lionized logical coherence and hyperrationality in politics.
In the view of the three thinkers under discussion, human beings are not repositories of hyperrationality.
Indeed, it was the scientific hyperrationality of someone like Szilard that Roald Hoffman had in mind when he wrote "Why Scientists Shouldn't Run the World" (Issues, Winter 1990-91).
In light of a more empirical world view, we now regard sight, not as the Elizabethans did--as the most nearly angelic sense in the hierarchy of senses--but as the hyperrationality of the hyperpredator.
Taking the Cappadocian trinitarian theology as a benchmark we can measure subsequent Eastern and Western theological developments, their alleged irrationality and hyperrationality.