ECONOMICS

Detailed explanation-1: -One assumption of rational decision making is that the decision maker is not aware of all possible alternatives and consequences. According to the concept of bounded rationality, managers make decisions rationally, but are limited by their ability to process information.

Detailed explanation-2: -The assumption of bounded rationality suggests that people use the rule of thumb and make the decision by a simple method rather than analyzing the available choice. It also suggests that with the change in the environment in which decisions have been made, the same method can be used.

Detailed explanation-3: -14) One assumption of bounded rationality is that managers can analyze all relevant information about all alternatives for a situation.

Detailed explanation-4: -Which of the following is an assumption of the bounded rationality model? Managers develop shortcuts, called heuristics, to make decisions in order to save mental activity.

Detailed explanation-5: -What is Bounded Rationality? Bounded rationality is a human decision-making process in which we attempt to satisfice, rather than optimize. In other words, we seek a decision that will be good enough, rather than the best possible decision.