Unit 2.4 · Critique of the Maximizing Behaviour of Consumers and Producers
Bounded Rationality
AO3HL
Syllabus Requirement
Consumers aim to make rational decisions but are limited by cognitive capacity and available information.
Assessment Objectives
AO3Synthesis and Evaluation
Summary
Bounded rationality refers to the idea that consumers try to make rational decisions, but their choices are limited by incomplete information, limited time, and limited cognitive ability. Instead of always finding the best possible option, consumers often choose an option that seems good enough. This challenges the classical economic assumption that consumers have perfect information and can always make fully rational choices.