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.
RAND, says Kuklick, "had a hyperrational idea of what policymakers might achieve, especially when brilliant social scientists joined enlightened leaders" (127).
The extraterrestrial future humans are hyperrational and emotionless; they have no concept of history and no need for feeling.
We are left only with cultural dupes or "hyperrational fools" (p.
In their examination of public rhetoric surrounding the 1978 accident at the Three Mile Island (Pennsylvania) nuclear power plant, Farrell and Goodnight depict a degraded nuclear-public sphere in which expert speakers offer hyperrational, narrowly drawn, sanitized, and largely inaccessible discourse which primarily validates its own contingent premises rather than serving the public goods of consensus and informed consent.
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.
They don't, like the Kesh, "give back." Their way is hyperrational and brutally instrumental--"straight, single, terrible" (210).
In the conclusion of the document, the commission offers its study as a careful, ecumenical reading of the scriptures that illuminates "in a new way the place of Mary in the economy of hope and grace." 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.
"Henry's blithe, bourgeois sentiments, the decency of which go unchallenged throughout Saturday, hardly provide the heft necessary to carry a novel ...," Szalai writes, leading readers to believe that Henry's hyperrational worldview prevails.
In words, (1) assumes a benign informational environment, which allows a "HyperRational Expectations Hypothesis" to hold.