Bounded reasoning is a way that people make decisions in which they try to "satisfice" instead of "optimize." In other words, we want to make a decision that is good enough, not the best one possible.
Where this bias occurs
Think about going to the store to buy eggs. You check out the different brands and choose a box of eggs that says "cagefree." By picking eggs from chickens that weren't raised in cages, you're showing that you care about being moral.
But when we make quick decisions based on words like "cagefree," we often don't stop to think about what those terms actually mean. We are making a choice based on a false sense of reason because we don't have all the facts. Maybe we don't have time to look up that "cagefree" can mean both "freerun" and "freerange," but only "freerange" chickens can go outside. Bounded reasoning tells us to make choices that meet a certain criterion, like being ethical, even if they aren't the best ones for that criterion.
Individual effects
Bounded rationality says that we are not likely to find all the information we need to make a good choice because of cognitive and temporal limits. This limitation forces us to choose options that are just good enough instead of continuing to look for the best one.
Our decisions are still reasonable based on the information we have, but not based on all the information that could be out there. Even though perfect economic rationality, which tries to maximize benefits while minimizing costs, is hard to follow, making decisions based on limited economic rationality can make us act in a way that goes against our goals.
Systemic effects

Boost your Retail marketing skills with our course: https://easymarketingschool.org/cours...

Content Creator: Aysun Ibadova, Kamran Tagiyev
Voiceover author: Jeremy G.
Animation author: Nazanin Suleymanova
Sound editor: Aysun Ibadova
Project manager: Kamran Tagiyev