What key aspect sets apart bounded rationality from traditional rational decision-making models?

Bounded rationality fundamentally acknowledges that decision-makers operate under constraints that limit their ability to process information and make perfectly rational choices. These constraints include limited access to information, cognitive limitations of the human mind, and the finite amount of time available to make decisions.

In contrast to traditional rational decision-making models, which assume that individuals have access to all information and the ability to analyze it without limitations, bounded rationality reflects a more realistic scenario where these ideal conditions do not exist. This concept recognizes that in many real-world situations, decisions must be made with incomplete information and under time pressure, where individuals often settle for a satisfactory solution rather than the optimal one.

Therefore, the distinguishing element of bounded rationality is the acknowledgment of real-world constraints that affect decision-making processes, making it a more applicable model for understanding how people actually make choices in everyday life.