q1: (200 words)
- Explain what Bounded Rationality is.
- Then discuss how this concept can affect the decision situation in SLP 3.
- Also discuss how this concept can affect the data analysis in Case 3.
- Explain your logic for both of your arguments. Are there any similarities between these two situations?
q2: response (70 words)
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Explain what Bounded Rationality is.
Bounded rationality is a psychological term that deals with the mind. It is the mind trying to take in all the information and then be able to make a rational decision in a short period of time. “Rationality is bounded because there are limits to our thinking capacity, available information, and time (Simon, 1982)” (Behavioraleconomics.com, n.d.). So, in other words bounded rationality is the brain cannot absorb all the information and is impossible to make a clear and concise decision of all the information that is available.
Then discuss how this concept can affect the decision situation in SLP 3.
Bounded rationality can affect the decision process in the SLP because with all the information that must be gathered to best place the Lucky restaurant things could be forgotten because the brain can only retain so much information. If one little aspect of the information is forgotten, then a decision could result in placing the restaurant in the wrong location.
Also discuss how this concept can affect the data analysis in Case 3.
So, with Case study bounded rationality can have a huge impact on the decision analysis. With all the different locations, figures for sales, different quarters, product lines and regions there is a lot of room to forget to add some of the data in the analysis and that could have a huge impact on decision making process for the Sunshine Floor Barn.
Explain your logic for both of your arguments. Are there any similarities between these two situations?
For both situations there are similarities between the two. Both have a lot of information to retain and with that there could be some information that was left out and that could have an impact on the decision making for both. The mind can only take in so much information at once and over loading the brain with huge amounts of information like both the SLP and Case study have things could be missed.