Meaning of “bounded rationality” in the English Dictionary


"bounded rationality" in Business English

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bounded rationalitynoun [ U ]

uk us

ECONOMICS the theory that people can understand only a limited amount of information within a limited amount of time, and for this reason they do not always make the best decisions, especially in complicated situations:

Managers constrained by bounded rationality cannot foresee all of the relevant behaviours needed for organizational effectiveness.

(Definition of “bounded rationality” from the Cambridge Business English Dictionary © Cambridge University Press)