MGMT1135 Study Guide - Midterm Guide: Bounded Rationality
Document Summary
A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity. Choosing a solution that is satisfactory and sufficient. Because the human mind cannot formulate and solve complex problems with full rationality, people operate within the confines of bounded rationality. An unconscious process created from distilled experience. The least rational way of making decisions. While intuition isn"t rational, it isn"t necessarily wrong. Intuition is not superstition, nor it is the product of some magical paranormal sixth sense. Intuition is a highly complex and highly developed form of reasoning that is based on years of experience and learning . Another non-rational dm is based on intuition, which is the least rational way of making decisions. Nor does it always operate in opposition to rational analysis. Rather, the two can complement each other. But intuition is not superstition, or the product of some magic or paranormal sixth sense.
