In a decision-making setting, if the manager has to contend with limits on the amount of information he or she can consider, this can lead to a poor decision due to __________.
A) bounded rationality
B) suboptimization
C) risk aversion
D) misspecification
E) complexification

Question

In a decision-making setting, if the manager has to contend with limits on the amount of information he or she can consider, this can lead to a poor decision due to __________.
A) bounded rationality
B) suboptimization
C) risk aversion
D) misspecification
E) complexification

Quizplus · Accepted Answer

Bounded rationality refers to the limitations of decision makers to process and consider all available information when making decisions. When managers face limits on the amount of information they can consider, they are more likely to make decisions based on incomplete or inadequate information, leading to poorer outcomes.

In a Decision-Making Setting, If the Manager Has to Contend