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 ?
Nonetheless, our approaches are similar: we both assume agents are less than hyperrational and stress the importance of historical acceptance.
But there are key differences: Baudelaire imagines these acts of torture, whereas Sade's characters carry them out; Baudelaire does not use hyperrational and morally neutral discourse to describe and justify these acts but is prone to dramatic outbursts; elements of remorse--the de Maistrean strand of his thinking--are often present in Baudelaire, whereas for Sade remorse is unthinkable because it is a barrier to further sexual enjoyment.
In countering modernity's hyperrational rejection of any religious belief or practice not defensible through reason alone, Milbank (at least on key points) merely reverses modernity's approach, as he criticizes any reason that does not proceed from the premises of the revealed Christian metanarrative.
For example, the utility of the hyperrational game-theory model likely increases under extreme competitive pressure while "garbage can" models will arguably find more theoretical utility in low-pressure environments.
Their way is hyperrational and brutally instrumental--"straight, single, terrible" (210).
The commission crafted this new way from the middle of the spectrum of contemporary positions on Mary, having nothing to do with the politics of the Catholic right or the hyperrational biases of many Catholic progressive theologians.
Szalai writes, leading readers to believe that Henry's hyperrational worldview prevails.
The larger this cost, the more reasonable it becomes for investors to use low-effort substitutes for hyperrational calculation.
The hyperrational discourse of the law school classroom and law journals is not, generally speaking, good training for populists.
The selection of films in this book illustrates the links between local and global cinematic styles, a selection infused by cinephilia rather than by a hyperrational methodology of inclusion.
Love sides with the so-called "deep" ecologists who contend that man "must break through its preoccupation with mediating between only human issues," the naive belief that all will be well if man deals only with the inter-human and hyperrational (227).
At a Yale Law School faculty workshop, I provocatively suggested that it would be immoral for anyone in the audience to purchase a car without installing Lojack, to which my colleague Jules Coleman replied that it was immoral for me to publish the paper because it might make it less likely that hyperrational consumers would take on the cost of purchasing Lojack.