Some models of human behavior in the social sciences assume that humans can be reasonably approximated or described as rational entities, as in rational choice theory or Downs' political agency model.Mancur Olson, Jr. ([1965] 1971). The Logic of Collective Action: Public Goods and the Theory of Groups, 2nd ed. Harvard University Press, Description, Table of Contents, and preview. The concept of bounded rationality complements the idea of rationality as optimization, which views decision-making as a fully rational process of finding an optimal choice given the information available. Therefore, bounded rationality can be said to address the discrepancy between the assumed perfect rationality of human behaviour (which is utilised by other economics theories), and the reality of human cognition. In short, bounded rationality revises notions of perfect rationality to account for the fact that perfectly rational decisions are often not feasible in practice because of the intractability of natural decision problems and the finite computational resources available for making them. The concept of bounded rationality continues to influence (and be debated in) different disciplines, including political science, economics, psychology, law, philosophy, and cognitive science.
Some models of human behavior in the social sciences assume that humans can be reasonably approximated or described as rational entities, as in rational choice theory or Downs' political agency model.Mancur Olson, Jr. ([1965] 1971). The Logic of Collective Action: Public Goods and the Theory of Groups, 2nd ed. Harvard University Press, Description, Table of Contents, and preview. The concept of bounded rationality complements the idea of rationality as optimization, which views decision-making as a fully rational process of finding an optimal choice given the information available. Therefore, bounded rationality can be said to address the discrepancy between the assumed perfect rationality of human behaviour (which is utilised by other economics theories), and the reality of human cognition. In short bounded rationality revises notions of perfect rationality to account for the fact that perfectly rational decisions are often not feasible in practice because of the intractability of natural decision problems and the finite computational resources available for making them. The concept of bounded rationality continues to influence (and be debated in) different disciplines, including political science, economics, psychology, law, philosophy, and cognitive science.