Bounded Rationality Model of Decision-Making
The concept provides a review of the practical decision-making process and explores the model’s strengths, limitations and implications by comparing it to the rational behaviour model.
Technique Overview
Bounded Rationality Model of Decision-Making Definition
There are two primary models or theories for decision-making: the Rational model and the Bounded rationality model. In the former, a decision-maker attempts to optimise the decision by selecting the best possible alternative. In the latter, rationality of individuals is limited by the information they have, cognitive limitations and time constraints (Kalantari, 2011).
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Business Evidence
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Further Reading
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Bounded Rationality Model of Decision-Making references (4 of up to 20) *
- Bozeman, B. and Pandey, S.K. (2004) Public Management Decision Making: Effects of Decision Content. Public administration review, Vol. 64(5), pp. 553-565.
- Conlisk, J. (1996) Why Bounded Rationality? Journal of Economic Literature, pp. 669-700.
- Eisenhardt, K.M. and Zbaracki, M.J. (1992) Strategic Decision Making. Strategic Management Journal, Vol. 13, pp. 17.
- Epstein, M.J. and Widener, S.K. (2010) Identification and Use of Sustainability Performance Measures in Decision-Making. Journal of Corporate Citizenship, Vol. 40, pp. 43-73.
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