Bounded Rationality
Updated 2026-09-10
INTRODUCTION
English translation pending.
CORE DEFINITION
Bounded rationality is Herbert Simon's replacement for the fully rational economic agent: rational behavior must be compatible with the information channels, computational capacity, and environment an agent actually has, rather than requiring a global optimum. It describes how cognitively limited agents really decide, treating satisficing thresholds and heuristics as defensible standards under three constraints: incomplete information, expensive computation, and limited time. The term names a research program in decision science rather than a claim that people are irrational.
SCAFFOLDING EFFECT
Reduce cognitive load
- Set satisficing thresholds: accept a good enough option as soon as your hard constraints are met. - Pick matching heuristics: choose simplified decision rules that fit the particular environment you face. - Challenge optimal models: first ask whether the agent could ever actually compute that optimum.
Anchor fast decisions
Real agents face incomplete information, costly computation, and limited time, so the search cost of optimizing often exceeds its benefit. Bounded rationality therefore treats good enough under constraints as defensible: heuristics narrow the search space and satisficing thresholds replace global comparison, letting decisions finish within limited resources while staying adaptive to the environment.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
account_treeGenealogyexpand_more
menu_bookReferencesexpand_more
Source support: Explicit
- plato.stanford.eduhttps://plato.stanford.edu/entries/bounded-rationality/verified
PRIVATE NOTES · Only visible to you
SAVED Q&A
ENTRY Q&A · Private saving available
Ask with a clear boundary
thinkingmodels answers from published entry context only.
Your question is sent to thinkingmodels. The answer uses public entry context only.
RELATED MODELS