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

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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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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