The concept of 'Bounded Rationality' associated with Herbert Simon implies that:
A. Individuals are limited in their cognitive capacity and information and therefore satisfice rather than optimise
B. Rationality is unbounded
C. Individuals always optimise with unlimited computational power
D. Only perfect information is assumed
Answer: Option A
Solution (By JKSSB Mock Tests)
Bounded rationality recognises that human decision-makers face cognitive limitations and incomplete information, so they typically seek satisfactory rather than optimal solutions.
Explanation:
Data-driven network effects arise when additional users generate data that improve the quality of the service (e.g., through better recommendations or predictions), which in turn attracts more users, creating a self-reinforcing cycle.
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