Bounded rationality refers to the limitations people face when making decisions. These limitations arise from the situation, their cognitive abilities, and the information available to them. As a result, people often rely on shortcuts and quick judgments instead of thoroughly analyzing all available options. Rather than seeking the perfect choice, they frequently settle for an option that meets their basic needs. The concept of bounded rationality acknowledges that individuals cannot always make perfectly rational decisions due to their cognitive constraints and the abundance of information in many situations.