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Bounded Rationality
(1980s)
Bounded rationality is a principle about decision making. It holds that there are cognitive limits to the knowledge of economic actors, such as manufacturers and consumers. They can therefore act rationally only up to a limit. In other words, their rationality is bounded.
Bounded rationality principle is developed by the American behaviorist Herbert Simon (1916-2001).
Also see: uncertainty, bernouilli's hypothesis
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