Editing Bounded rationality (section)

===Examples===
{{Original research section|date=August 2023}}
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An example of bounded rationality in individuals would be a customer who made a suboptimal decision to order some food at the restaurant because they felt rushed by the waiter who was waiting beside the table. Another example is a trader who would make a moderate and risky decision to trade their stock due to time pressure and imperfect information of the market at that time.

In an organisational context, a CEO cannot make fully rational decisions in an ad-hoc situation because their cognition was overwhelmed by a lot of information in that tense situation. The CEO also needs to take time to process all the information given to them, but due to the limited time and fast decision making needed, they will disregard some information in determining the decision.

Bounded rationality can have significant effects on political decision-making, voter behavior, and policy outcomes. A prominent example of this is heuristic-based voting. According to the theory of bounded rationality, individuals have limited time, information, and cognitive resources to make decisions. In the context of voting, this means that most voters cannot realistically gather and process all available information about candidates, issues, and policies. Even if such information were available, the time and effort required to analyze it would be prohibitively high for many voters. As a result, voters often resort to heuristics, which allow voters to make decisions based on cues like party affiliation, candidate appearance, or single-issue positions, rather than engaging in a comprehensive evaluation of all relevant factors. For example, a voter who relies on the heuristic of party affiliation may vote for a candidate whose policies do not actually align with their interests, simply because the candidate belongs to their preferred party.<ref>{{Cite journal |last=Wang |first=X. T. |date=July 3, 2007 |title=Decision heuristics as predictors of public choice |url=https://onlinelibrary.wiley.com/doi/10.1002/bdm.577 |journal=Journal of Behavioral Decision Making |language=en |volume=21 |issue=1 |pages=77–89 |doi=10.1002/bdm.577 |issn=0894-3257}}</ref>

Even without heuristic-based voting, many voters do not consider the feasibility or consequences of sweeping goals claimed by candidates.  For example, everyone would prefer to pay less tax all else being equal.  A candidate who promises to cut taxes without cutting services is likely to get votes, even though the goal is infeasible.  This is because the voters do not think the issue through.  Similarly, a person who depends upon a government service may vote for a candidate who promises to cut "waste", even if that "waste" consists of the service that the person depends upon.  This occurs because the person has not investigated the details of the policy, which is bounded rationality. Since the very rich have more resources to determine which policies are actually in their interest than the poor do, this bounded rationality has a bias towards policies that favour the rich at the expense of the poor.

Similarly, the politics of fear relies on bounded rationality: a politician creates fear of somebody (bankers, migrants, a [[deep state]], [[communism|communists]]) and promises to keep people safe from that threat, relying on people not to evaluate the threat properly, nor to consider the role the candidate may have played in creating the threat. This is at the heart of [[populism]], and why wartime leaders gain popular support.  A similar effect occurs when voters believe that the current politician is performing badly and "the alternative can't be any worse", without paying enough attention to the policies of the alternative.