✅ Bounded Rationality Approach

Proposed by: Herbert A. Simon

Year Introduced: 1957 (in his book “Administrative Behavior”)

🔹 Core Idea:

Humans are not perfectly rational. In reality, decision-makers face limited time, limited information, and limited mental capacity, so they cannot evaluate every option. Instead, they choose the first satisfactory solution — a concept known as “satisficing” (a mix of satisfy and suffice).

🔹 Key Features:

• Decisions are made under constraints (time, data, cognitive limits).

• Alternatives are not all evaluated; only a few are considered.

• The goal is adequacy, not perfection.

🔹 Example:

A manager hiring for a role quickly picks a candidate who is “good enough” instead of reviewing every possible applicant.

🔹 Best Used When:

• Information is incomplete or unclear.

• Quick decisions are needed.

• Resources for deep analysis are lacking.