BOUNDED RATIONALITY APPROACH AS AN ALTERNATIVE TO RATIONAL CHOICE: A CRITICAL PERSPECTIVE

Abstract

Rational choice theory is a framework formed in order to explain organizational and economical behaviours in decision making process. Basically, it is claimed that people calculate costs and benefits of their actions before initiating to do any activity. Although Rational Choice Theory has a quite important background which various social science fields benefit from, it frequently confronts some criticisms especially coming from Human relations school.Bounded Rationality Approach offers an argument by claiming that human being has limited mind to make optimum choices, therefore, tries to satisfy rather than optimize. There is still an ambiguity in the literature whether these two approaches should be used separately or mutually complementary. Accordingly, this paper discusses whether Bounded Rationality Approach can replace Rational Choice Theory by overcoming lacks of it. It is concluded that Bounded Rationality Approach is not able to substitute Rational Choice Theory, though its persuasive arguments provide an insight in order to comprehend the complex decision making process.

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