Editing Bounded rationality (section)

== Principles of boundedness ==
In addition to bounded rationality, bounded willpower and bounded selfishness are two other key concepts in behavioral economics that challenge the traditional [[Neoclassical economics|neoclassical economic assumption]] of perfectly rational, self-interested, and self-disciplined individuals.<ref name=":5">{{Cite web |title=How Behavioral Economics Differs from Traditional Economics |url=https://www.econlib.org/library/Enc/BehavioralEconomics.html}}</ref> 

Bounded willpower refers to the idea that people often have difficulty following through on their long-term plans and intentions due to limited self-control and the tendency to prioritize short-term desires. This can lead to problems like procrastination, impulsive spending, and unhealthy lifestyle choices. The concept of bounded willpower is closely related to the idea of [[hyperbolic discounting]], which describes how people tend to value immediate rewards more highly than future ones, leading to inconsistent preferences over time.<ref name=":5" />

While traditional economic models assume that people are primarily motivated by self-interest, bounded selfishness suggests that people also have social preferences and care about factors such as fairness, reciprocity, and the well-being of others. This concept helps explain phenomena like charitable giving, cooperation in social dilemmas, and the existence of social norms.<ref name=":5" /> However, people's concern for others is often bounded in the sense that it is limited in scope and can be influenced by factors such as [[in-group favoritism]] and emotional distance.<ref>{{Cite journal |last1=Cadsby |first1=C. Bram |last2=Du |first2=Ninghua |last3=Song |first3=Fei |date=2016-08-01 |title=In-group favoritism and moral decision-making |url=https://www.sciencedirect.com/science/article/pii/S0167268116300877 |journal=Journal of Economic Behavior & Organization |volume=128 |pages=59–71 |doi=10.1016/j.jebo.2016.05.008 |issn=0167-2681}}</ref>

Together, these three concepts form the core of behavioral economics and have been used to develop more realistic models of human decision-making and behavior. By recognizing the limitations and biases that people face in their daily lives, behavioral economists aim to design policies, institutions, and choice architectures that can help people make better decisions and achieve their long-term goals.