Chances are, you are already experiencing the consequences of bounded rationality in your everyday life.
For one thing, to understand bounded rationality is to understand that as a human, you are inherently an irrational being trying to fit into a rational box. You are constantly making choices—and likely putting pressure on yourself to make the ‘right’ one—while having to overcome a variety of biases and heuristics you are already prone to.
Of course, you are also susceptible to cognitive fatigue. After a 15-hour shift at work or the mental effort it takes to resist a third slice of pizza, you are more prone to using heuristics and more likely to make a poor decision than you might after a restful 8 hours of sleep. Although heuristics and biases are always present, they can be much more influential when your mental resources are depleted.
Also, each of your choices requires a certain amount of information before it can be made. While you know this, you also know that you don’t have the time nor money to consult all possible information on a topic before making a decision about it. You may ask one or two people who have been to different universities before making your own choice, but you’re not going to consult all existing alumni. Thus, bounded by a certain fixed level of cognitive resources and information at any given time, your choices are probably about half chance.
So far, do you feel more sure of your last choice, or less sure? On one hand, the concept of bounded rationality can be terrifying since it comes with the conclusion that you don’t have full control over your choices, and therefore can’t guarantee your desired outcomes.
On the other hand, the concept of bounded rationality is humbling, as it brings attention to the fact that there is not always a perfectly ‘right choice’ and that our decisions are the result of a variety of uncontrollable factors.
Overall, the concept of bounded rationality calls attention to the fact that we need a certain degree of irrationality in order to live a rational life. Although your choices may be partially irrational since they are based on limited resources, would it be more rational to spend days on end compiling all possible information you could find before making a simple choice? Absolutely not. In order to live a life that is rational, we need to give in to a certain level of ‘irrational’ decisions.