Bounded rationality model

Question 1

What are the steps

Answer 1

Define the problem
Use the information
Evaluate choices
Decide outcome

Question 2

Define the problem

Answer 2

Representation of problem is limited, approximate, model of actual situation

Question 3

Use of informaiton

Answer 3

Only readily information is used; information that require effort to obtain are often overlooked

Much of the decisions are based on incomplete or ambiguous data, leading to uncertainty and “guess-timating” the liklihood of certain outcomes

Question 4

Evaluation of choices

Answer 4

Choices are evaluated in terms of wheather they meet the minimally acceptable standards, established by the decision maker

What are considered as “minimally acceptable standards” based largely on what have worked in the past and the use og heuritcis or decisonal shortcuts

Limited, as opposed to axhaustive, time and effort spent on identitfying choices to consider

Question 5

Decision outcome

Answer 5

The first choice that is judged as both satisfying and sufficient is selected. The objective is to pick the choice that is good enough rather than the most optimal choice