Bounded Rationality describes the practical decision-making processes individuals and organizations use when perfect information is unavailable, emphasizing satisfactory outcomes over optimal ones. It addresses the limitations of human cognition in economic models.
Past events which play no part in rational present decision-making. For a firm, bygones include sunk costs and past operating profits and losses, except to the extent that these play a part in forming present expectations.
An in-depth exploration of cognitive biases, their types, examples, historical context, and importance in various fields like psychology, economics, and decision-making.
A comprehensive examination of consumer rationality, its axioms, historical context, key events, and implications in various fields such as economics, finance, and psychology.
A comprehensive examination of credible threats, their historical context, types, key events, theoretical foundations, importance, and practical implications.
An in-depth exploration of Decision Theory, covering principles, methods, types, historical context, applications, and related terms.
Decision Theory is the analysis of rational decision-making, evaluating choices based on consequences, utility functions, probability distributions, and subjective probabilities. It examines decision-making under certainty, risk, and uncertainty, highlighting the conditions for optimal choices.
An in-depth analysis of the concept of Homo Economicus, a theoretical figure representing the rational and self-interested decision-maker in classical economics.
An observation that the level of voter turnout is inconsistent with rational decision-making on whether or not to vote. This paradox highlights the discrepancy between the low expected benefit of voting and the high cost, yet turnout remains high due to factors like social customs and duties.
Understanding the concept of 'plausible' which refers to something that appears reasonable or probable. This article delves into its historical context, types, key events, examples, and much more.
An in-depth exploration of the concept of satisficing, its historical context, applications, and significance in decision-making.
An in-depth exploration of Stoicism, a philosophy that emphasizes self-control, virtue, and rationality over pleasure and external goods.
A comprehensive exploration of Homo Economicus, the figurative human being characterized by the infinite ability to make rational decisions, including its definition, meaning, historical context, and relevance in economic theory.
