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Essay / Research Paper Abstract
A 3 page paper that explains and discusses bounded rationality in terms of decision making. Bibliography lists 3 sources.
Page Count:
3 pages (~225 words per page)
File: ME12_PGbndrd.rtf
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Unformatted sample text from the term paper:
will never have all of the information or data by the time they must make the decision. Most decisions must be made within a particular period of time. March
(1978) comments that in rational choice, there are two types of guesses. One guess relates to the consequences of actions taken today and the other is guesses about what will
be preferred in the future. In other words, we try to predict the outcomes and impacts of our choice or we try to imagine what would actually be preferred in
the future. Predicting or anticipating the future is always a risk, not to mention confusing (March, 1978). There is a great deal of uncertainty whenever anyone makes a decision.
In 1957. Simon offered the concept of bounded rationality as a way to explain decision making. Simon noted that there are always constraints when making decisions and that the rational
behavior of humans always have constraints. Because of this, humans develop procedures to make decisions that are sensible in view of the constraints within which they operate. This became known
as safisficiing which means that humans make the best decisions they can make with the information they have and with the constraints that limit them (March, 1978). It is a
theory of choice. Simon (1978) pointed out that classical decision making models do not work very well when there is a high degree of uncertainty. He explains that "rationality is
bounded when it falls short of omniscience" (Simon, 1978, p. 356). Failures of omniscience means the person does not know all the alternatives that may exist, the individual is unable
to calculate all of the possible consequences of the decision, and that there is uncertainty about external events. Decision makers need a way to make decisions within this arena of
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