Irrational Decision-making

The first major shot across the bows of the rational decision-making model of Expected Utility Theory came from Herbert Simon. Simon, who won a Nobel Prize for his work in 1978, coined the phrase “bounded rationality” to describe the limited extent to which we make logical decisions in organizations. Instead of maximising and finding the best solution to a problem, we typically satisfice and settle for the solution with which we can make do.

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