In 1957, Herbert Simon came up with the idea of “Bounded Rationality,” for which he eventually won the Nobel Prize in Economics in 1978. Bounded rationality states that, because of cognitive limitations, we do not make decisions rationally, but only try to get by or manage. The term that was coined in this context is “satisficing” (a combination of satisfy and suffice). This idea became the cornerstone of what we know today as behavioural economics, which investigates decision-making biases.
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