In psychology, what is Bounded Rationality?

This refers to a behavioural hypothesis which states that the rational ability of individuals is limited by various factors when it comes to making decisions. A person making a decision may possess only limited cognitive ability to process relevant information or may be affected by biases that influence rational decision-making. The term was coined by American economist Herbert A. Simon in his 1957 book Models of Man. The idea of bounded rationality is in contrast to the traditional belief in the individual as a perfectly rational being who possesses sufficient information and capability to make the right choices at all times.