Bounded rationality is the fact that when we take decisions as humans, we cannot think of all things, all variables, all parameters, and all factors going on in the environments. Instead, we should think, and we cannot think to broadly, and all history, all present, and all future is the same with the humans having limitations in their brains and in their bodies.
Bounded rationality is the idea that rationality is limited when individuals make and take decisions. The limitations are due to the inclusion with the decisions, the cognitive ability to the mind, and the time that is available for taking a decision. Hence, we art of being a human, is to make and to take quality in the limitations one has in the mind, and with the brain being focused on doing tasks, and when getting satisfaction from the environments.
The human asset is equipped with intelligence and thinking ability. The human is according to the religious book you can find about explanations of human nature and nature in past and in present and in future, a very noble creature of God and lord over all animals. Hence, we find what we are as a human asset when reading the literature, and think what this information is doing with us with the consequences that this information has.
How bounded is our rationality as being humans really when we come to explaining how the human mind and the human body are functioning many places! The psychologist George A. Miller was an American academic, and he was among several schools in MIT, Princeton University and Harvard University to take the most lucrative schools where he was, when we are thinking of all the universities and all the colleges we find on the planet. George A. Miller was professor by Harvard University in 1958. He wrote considerable contributions in cognitive psychology, and this was for instance the article: “The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information”. This contribution was published by Harvard University and the department for psychology in 1956. It means that we can process maximum 9 bits of information during a time, on average we are processing seven bits of information, and the most bad people can just process five bits of information. And this way of thinking is valid throughout the whole earth, since this is how our brain is reacting when taking and giving information. And this recognition is prevalent both in business life, in schools and in private homes for all people you can imagine in history! We cannot be another person than the qualities that we have when being born to the earth, and the limitations of information processing is valid through the whole life, and bounded rationality is applicable at all levels in the organizations and in the societies. And it does not change itself if we are training and doing travelling, since humans are as humans are! And this has been the situation through all the times that we have found humans at earth!
George A. Miller formulated the chunk concept in 1956, as he presented evidence that working memory is limited in capacity. Working memory is a short-term memory, and this implies that we cannot remember everything, and this is also a valid recognition as we have been in life ever, and what we can be as a human to all times, also in the future. Long-term memory implies that we can remember a thing and a person long back in history, and working memory is weaker when we are getting older, and therefore old people remember the past better than present and the future. We can also put bits of information together, and this is called for chunking of information. Hence, we can remember more than else if we are putting information together by chunking information. Chunking is putting much information to some key words, and this implies that we can remember more. But the article of George A. Miller is still valid, and therefore bits of information can be used with little, appropriate or much information.
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Sverre Larsen
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