Bounded rationality is a concept in decision-making that suggests individuals are limited in their ability to process information. This limitation arises from constraints such as time, cognitive capacity, and available information. As a result, people often rely on heuristics or mental shortcuts to make decisions, which can lead to suboptimal outcomes. The term was introduced by Herbert Simon, a psychologist and economist, who argued that while individuals strive to make rational choices, they often settle for satisfactory solutions instead of optimal ones. This approach acknowledges the complexities of real-world situations and the inherent limitations of human reasoning.