What does the concept of 'bounded rationality' imply?

The concept of 'bounded rationality' implies that individuals use simplified strategies for decision-making due to limitations in their cognitive resources. This idea, introduced by Herbert Simon, suggests that while people strive to make rational choices, their ability to process information, evaluate all possible alternatives, and foresee the consequences is constrained by factors such as time, available information, and cognitive capacity. Consequently, individuals often settle for a satisfactory solution rather than an optimal one, utilizing heuristics or rules of thumb to make decisions more manageable given their constraints. This approach enables them to navigate complex decision-making environments without needing to evaluate every possible option exhaustively.