Personal Development Archives

Bounded Rationality: When You Really Don’t Know Enough

© 2025 AI generated image conceptualizing bounded rationality

I spent 20 minutes deciding which bread to buy. It was supposed to be a quick in/out trip to the store, but because I arrived late in the day, the bread I usually buy was gone. I spent another ten minutes in the egg aisle debating between brands and if my family really needed eighteen eggs versus twelve, because, well, egg prices. Each of these decisions—buying a different bread and choosing between egg brands share one thing in common: bounded rationality. But what the heck is that?

Bounded rationality means that our experiences and the environment constrain our ability to make purely rational decisions. We might be bound by time, available information, and/or cognitive capacity (the info we can process and keep in our heads at any time.) Here’s a 3-Minute Introduction to the concept.

Trapped in a Loop

Without realizing it, bounded rationality was in full effect. When I arrived at the store, I ultimately had to settle for whatever “good enough” bread remained that I believed my family might like, and that still fit some of my requirements. The eggs? That came down to the price per egg because ultimately I’m not brand loyal. My family’s preferences, time, and cost all influenced my decision. This happens to everyone.

For example, you’re in a store like I was except you’re exhausted from having stayed up late with your sick child, dropped them at daycare (without mentioning they were tossing cookies well into the early ‘morn—no judging, it happens), and arrived at work for a 10-hour shift. Now you need to buy groceries, but you also skipped lunch and are borderline hangry.

What factors determine your grocery purchases? Bounded rationality for the win!

In the above example, you’re more likely to choose the “good enough” (aka satisficing) options instead of trying to make the optimal choices. You’ll lean into short cuts like, “I bought this before, I’ll just get this.” Of course, if you’re truly exhausted, you might walk out with a few pints of Ben & Jerry’s, a bag of popcorn, and pre-sliced veggies. Protein, fiber, and vitamins.

We have limits on our ability to make the absolute best decisions in every aspect of our lives. It’s unrealistic to believe we know every piece of information before deciding. That doesn’t stop us from trying, though!

When Bounded Rationality Hinders Success

Bounded rationality is useful, that’s why we do it, but it can mean our choices aren’t as helpful as they could be. My family and I are watching The Last of Us. I’m not usually a zombie person, but the show is decent. In every apocalyptic show we’ve watched, the characters never make the optimal choice. For example, Kathleen.

Kathleen is pissed. There’s no getting around that fact. Why? ‘Cause someone killed her brother. She knows who. She knows why. None of that matters to Kathleen. The only thing that does is, in her words, “justice.” She kills the only doctor in their encampment because he won’t tell her where to find the killer. She expends finite resources to find him.

How does bounded rationality rule her world? Based on her experiences, she views certain people as expendable, values loyalty to her above all else (initially using follower’s loyalty to her brother as a stepping stone), and doesn’t tolerate anyone questioning her behavior or decisions. They fall in line. When she insists on pursuing her brother’s killer, she believes doing so will give her the result she wants. Kathleen entertains no other outcomes.

If Kathleen had thought about other outcomes, she … oh, I can’t tell you! I don’t want to spoil the show for you!

Identify the Mental Shortcuts You Use Daily

People love hacks. We’re “all in” for anything that makes getting what we want easier and faster. So it’s no surprise that our brain is hard-wired to look for the simplist decision-making route. In psychological terms, a heuristic is a way for us to decide things quickly.

For example, what’s the best-selling soda brand in the world? (Google it after you finish reading!)

When we are deciding something, two heuristics commonly come into play.

Availability Heuristic: We determine the likelihood of an event based on how easily information about it comes to mind
Framing Effect: The presentation (packaging) of the information influences our choice(s).

The best-selling soda is an example of an availability heuristic. Based on your knowledge of soda brands, whatever popped into your head first is probably the one you selected as “best-selling.” It did for me (and I was right!)

An example of framing is seeing two packages for the same product. The first describes the item as “90% fat free” and the second as having “10% fat.” ¹ Most people would choose the first one. Marketers are adept at their use of framing, but so are we. The language we use to describe our experiences can shift our mindset and motivation. Have you read Carol Dweck’s book Mindset?

Bounded Rationality and Cognitive Biases

These heuristics are not the same as cognitive biases, of which there are several. Cognitive biases are more accurately described as “thinking errors.” Anchoring and confirmation biases are examples.

How Does the Anchoring Effect Affect Decisions?

Anchoring involves attaching more importance to the first piece of information you receive, and then comparing everything else to it. For example, you get a quote for window installation from a contractor and maybe you think it’s too high. You decide to get at least two more quotes.

During the decision process, you give more weight to the initial quote because you received it first, not necessarily because it’s better. In fact, if the other quotes are lower, you’ll likely want to know why, but this is because of your anchor. You don’t consider that the initial quote might have been completely off base.

The price of window installation is only one piece of information. The anchoring bias can stop you from considering the quality of a product (the windows), the reputation of a contractor, their responsiveness, and many other things that comprise a purchase decision. To counter this, you gather more information, compare “apples to apples” (or try to!) and then decide.

What is Confirmation Bias?

A confirmation bias happens when we unconsciously seek information that supports our position and ignore or discount anything that doesn’t. This bias also affects how we interpret and remember (or don’t) information relevant to our beliefs. The easiest example of this is politics.

Compare these two article titles: McDonald’s posts biggest US sales drop since Covid-19 pandemic vs Trump trade war hits McDonald’s as US sales fall sharply.

Which would you read?

Based solely on the titles, would you say they lean left, right, or center? Confirmation bias affects the articles we choose to read. We are more likely to choose whichever title already fits our current beliefs about a subject.

What information are we missing? Scary, isn’t it? Fortunately, we can guard against these two biases.

Bounded Rationality Action Steps

Pay attention to how you make snap judgments about people and situations.
Notice when you default to familiar solutions rather than exploring new ones.
Keep track of decisions made quickly and analyze their effectiveness.
Recognize when these heuristics help and when they lead to poor decisions.
Challenge your assumptions when making important choices.
Question information that confirms your existing belief.
Seek opposing perspectives that test your stance.

Balance Intuition with Rational Thinking

Intuition is that nudge you sense when something feels off, but it’s also the excitement you feel, but can’t explain, when you know in your bones that you’re heading in the right direction. It’s your internal GPS, but like Google maps, sometimes it leads you down a narrow alley instead of a street.

Good decision-making benefits from gathering information, stepping back for a short period, analyzing the data, and then deciding. ²No rush required, regardless of FOMO. Push past that nonsense. Approach decisions “eyes wide open.”

Deciding to do or not do something combines intuition (past experiences, including those we observe) and information gathering. While we can’t possibly know everything — bounded rationality — at the moment, we can make the best possible decision with what we know (intuition + experiences).

How to Avoid Decision Paralysis

For about 14 years, we operated a specialty tea business. Every spring through summer, and at any event, we offered free samples. With over 100 custom blends available, narrowing the field to only six each week was part science, part luck. Six was the magic number. More than that, and I’d see a glaze settle over our potential customer’s eyes.

It’s possible to have too much information and suffer from decision paralysis. I’d seen it many times when people came into our store and saw the number of teas displayed in sniffing jars. Where should they start?

We have to narrow our choices, but not so much that we’re only relying on our gut to decide. After all, intuition is partly about pattern recognition.³

We become so adept at finding them that sometimes we forget to gather important details.

For example, when a customer’s eyes glazed over, I’d ask, “What flavors do you like?” This helped us narrow their choices. If the answer included citrus, I’d steer them toward Tropical Dreams (one of our best sellers), and a handful of others (never over six). Thus, giving them their place to start.

Intuition vs Rationality Action Steps

Use intuition for quick, low-risk decisions but rely on analysis for complex ones.
Double-check intuitive decisions with logical reasoning when necessary.
Get a second opinion when making high-stakes choices.
Use data and evidence rather than relying solely on gut feelings.
Automate predictable decisions to save mental energy. For example, work clothing.
Establish personal rules (e.g., always choosing the healthiest option from a menu).
Create a structured process for evaluating major life or business decisions. (ex., 6 Thinking Hats)

How to Use the Six Thinking Hats to counter Bounded Rationality

The Six Thinking Hats helps you explore your problem from six perspectives (roles). Dr. Edward de Bono developed The Six Thinking Hats, which is a form of parallel thinking (an alternative to adversarial thinking). He’s also the person behind the concept of lateral thinking. Through his work on lateral, and then parallel thinking, De Bono’s focus became “what can be.”

In a group setting (family, business, nonprofit), everyone wears the same hat at the same time. This helps to ensure everyone is starting and ending on the same page while discussing a problem.

THE HATS (in this order)

Blue Hat (Process Control): The focus is on managing the thinking process, setting objectives, and summarizing outcomes. Usually only one person takes on this role. Their job is to keep everyone focused and they decide when it’s appropriate to move forward to another hat.

White Hat (Facts): This hat is all about objectivity. You focus on what you know and don’t know about the problem or topic.

Red Hat (Emotions & Feelings): No judging or justification needed. Share and acknowledge your gut reaction, feelings, and intuition. The red hat frees everyone to be honest about the problem without fear.

Black Hat (Caution): Identify potential downsides and risks. What are possible unintended consequences?

Yellow Hat (Optimism): What are the potential benefits, advantages, and/or opportunities related to solving the problem.

Green Hat (Creativity): Brainstorm. What are some new ideas, alternatives, or possibilities related to the current situation? Remember, there are no right/wrong answers during brainstorming.

Now it’s your turn. What problem do you want to tackle using The Six Thinking Hats method?

Resource Roundup

ANCHOR: not your every day journal, but it could be is the perfect (shameful plug) book for self-reflection. It’s your personal self-discovery experimental research tool.

The Fundamental Forward Shift: The Key to Sustainable Growth helps you start where you are now.

Intuition: When is it right to trust your gut instincts?

Dangerous Instincts

Why You Should Not Always Trust Your Intuition

8 Truths About Intuition

The next time you kick yourself for making a less-than-optimal decision, recognize bounded rationality is at play. Then, conduct a post-mortem on your decision. Learn the lessons your choice revealed, and move forward. While this might be difficult sometimes (no one enjoys admitting they’ve screwed up), it’s how we make lasting, sustainable changes in our lives.

Citations

1
Sage Students (16 June 2022). The Mental Shortcuts that Define Your World https://youtu.be/izciZdvChO8?si=rLNOrASTx26e5uGE
2
Farrell, M. (6 Jan 2023) Data and Intuition: Good decisions need both. Harvard Business Publishing, https://harvardbusiness.org/data-and-intution-good-decisions-need-both
3
Alós-Ferrer, C. (24 March 2023). The Dangers of Intuition. Psychology Today. Retrieved May 6, 2025 https://www.psychologytoday.com/us/blog/decisions-and-the-brain-/202303/the-dangers-of-intuition

Fundamental Forward Shift: The Key to Sustainable Growth

by KDMiller | Personal Development

What does a fundamental forward shift and learning to swim have in common?

When I was a kid, my parents put me into swimming lessons. I don’t remember how old I was, but I remember not wanting to go. Up to that moment, I’d been content with life in the shallow end.

But staying there wasn’t an option.

The first day of lessons, kids eager to launch themselves from the side of the pool surrounded me. Meanwhile, I stood shivering and waiting for the lesson to be over. I knew that eventually, maybe not this day, but soon, I’d have to go into the deep end.

Along the edge of the pool, the other kids giggled and squirmed. I wasn’t having any of it and backed further away. One instructor waved, encouraging me to move closer. From the viewing gallery, I sensed the Wise One’s eyes on me. (He’s my inspiration for “the look” that I cultivated so well it still stops misbehaving children mid-tantrum.)

I inched forward.

One-by-one, we jumped into the pool. This was the easy part. I’d done it hundreds of times before, and loved it — in the safety of the shallow end.

But when the instructors announced that to pass the class we’d have to jump from the diving board, a detail of which my parents failed to mention, panic shot through me like a ball racing around a pinball machine.

One added, “Your toes have to dangle at the end of the board.” The other gave us a visual. One hand plopped over the other, fingers fluttering. I hated these people.

Surely they were joking. Why would our toes need to be in that specific spot?

The day finally arrived. We marched dutifully to the deep end of the pool, each awaiting our fate. Some exuberant, others, mainly me, not so much.

Splash! Plop!

“Can I do it again?” Over and over, until …

It was my turn to step onto the board, my sloth skills in full effect.

“A little bit more. Get your toes over the edge.”

One tiny step forward.

“More. You’re almost there.”

The scratchy bumps of the board scraped along the bottoms of my feet.

“Jump!”

“No.”

“You can do it. We’re right here. Jump!”

“No.”

Actions or thoughts that propel us forward or yank us backward require consistency. It’s the key. The only question is if we’re willing to break the connection between our consistent negative actions or thoughts, in favor of positive, more healthful ones.

Think how consistent our behaviors and thoughts are when we’re stopping ourselves from moving toward the thing we say we want. That level of consistency, applied in a more beneficial, perhaps more challenging, direction, is a fundamental forward shift.

A fundamental forward shift is understanding that we get what we want through small, positively skewed, consistent actions and thoughts. It doesn’t matter if those actions are successes or failures, but how we think about those failures matters tremendously.

Like a lot of things in life, failure ain’t all bad. This reminds me of something Captain Jack Sparrow said in Pirates of the Caribbean.

The problem isn’t the problem. The problem is your attitude about the problem.

Few people would say, “I love failing!” Most times, failure sucks. It’s mentally and physically draining. Sometimes it’s embarrassing, like when you mean to dive gracefully into a pool, but bellyflop instead. Other times, no one sees our failure, but we feel like we’re drowning in it.

Consider this: without failure, we wouldn’t know how great success feels. In fact, we wouldn’t be able to define success. Failure builds resiliency. We learn and grow through our mistakes. When we navigate a failure, we feel better about ourselves and we learn what to avoid or change the next time. It teaches us we have the stuff it takes to succeed. We also figure out how to manage the negative emotions that bubble to the surface when we fail.

All that’s great, but the best thing about failure is that we don’t have to experience it to learn from it. When we see other people fail, we learn the obvious “don’t do what they did,” and we gain empathy. Seeing other people fail also confirms we’re not the only ones who struggle. For some, it might temporarily increase their sense of self-worth as they compare themselves to the person who failed.

Failure and the Art of Juggling

How to change your mindset and unleash your potential

Redefine F.E.A.R.

There I was, toes dangling, dare I say fluttering, ever so slightly off the end of the diving board, and wanting desperately to be anywhere else but on the precipice of … okay, I’m being dramatic.

The point is, I wanted off that board and the only way off was into the water. I had to trust the instructors, but more importantly, I had to trust and believe in myself.

Through consistent effort (and an attitude adjustment care of The Wise One), I’d developed the fundamental skills that would move me forward. Had I attended the lessons, but refused to practice, that consistent, but negative behavior would have held me back.

The key is consistency, so why not choose the route that benefits us most? Why not choose positively skewed actions and thoughts?

Because we’re scared.

It’s okay to be afraid. Change is exciting, often overwhelming, and filled with uncertainty. But we’ve all heard it before. Uncertainty is where the action is. If we want different anything, then we have to embrace uncertainty.

DId I jump into the pool? Yes, and I did it again and again. Each time with less hesitation and uncertainty about the outcome. Experience does that, but consistency in thoughts and actions, positively skewed, made me keep climbing the ladder.

Here are 5 questions to help you with your fundamental forward shift.

What contributes to your fear of failing or succeeding?
What have you already learned about failure and success?
How can you reframe your thoughts about failure and success?
How would you describe failure? Is your description negatively skewed? Reframe it.
What was your last success (big or small)? Describe it. How does remembering it make you feel?

If you want to dig deeper, grab a copy of ANCHOR: It’s not your every day journal … but it could be. Then, head over to Deckible and check out VIBE: The Extrovert’s Recharge Deck, The Confidence Reset, and The Stronger Man Project. Our digital card decks make personal growth practical.

Who’s in your corner?

by KDMiller | Personal Development

When you think about the things you’ve accomplished in your life, how did you do it? Who were the people who helped you?

Nothing is accomplished by a lone individual. Someone somewhere helped pave the way, or even more directly, gave you their time or access to resources.

For example, several years ago I made the decision to fulfill a lifelong goal. I’d studied martial arts off and on since I was 17-years-old, but hadn’t stayed anywhere long enough to get higher than the rank of brown belt.

When we relocated to our current home, I found a dojang that taught Hapkido. I fell in love with this art. Training was fun! My instructor and many senior students worked with me to prepare for each testing.

They weren’t the only ones, though. My husband practiced locks and other drills with me hours before I’d leave for each testing. If he couldn’t do it, which wasn’t often, our son would help me.

Grappling was part of our training, and I had no experience doing it. Other instructors broke it down for me, and I started to understand what to do, and when to do it.

I began to flourish under the guidance of my instructors and senior students. It was a fabulous experience filled with challenge and growth, but not just physically.

When I wanted to quit due to an injury, my instructor encouraged and pushed me not to give up. I was one rank away from my goal.

But, that injury was at the hands of the head instructor of the school. I was angry and frustrated. Why had he intentionally hurt me?

Every student who witnessed it, including my instructor, knew two things about me that day. First, I could take a serious hit, and second, I was going to walk out and never come back.

The anger I felt had to be overcome if I was going to reach the next level. If my instructor hadn’t been there to talk me out of it, I would have quit. And I would have regretted it.

I spent the next few months recovering and preparing for the next test. The week of black belt testing, I decided to get in a little more training in a different class. The instructor of that class paired us off and told us to practice techniques.

My partner, who wasn’t an Hapkidoist, asked me to throw a kick. He caught it, ripped my leg forward, and pulled it a bit out of its socket. I fell to the mat. He thought it was funny. When I was finally able to get up, I didn’t retaliate.

In the back of my mind, I heard my instructor telling me “don’t quit.”

When it was my turn, I explained what I was about to do. I had a cane — my weapon of choice. If I hadn’t explained the technique and what to expect, he would have had a broken arm or dislocated shoulder. Either way, lots of pain.

My instructor’s patience, encouragement, and understanding helped me reach first dan. He also prepared me to move on knowing that I couldn’t stay in that dojang. The anger I felt still was below the surface. Any trust I had for the head instructor and some of his students was gone.

That’s what touchstones do.

How familiar are you with “touchstones?” The first time I recall hearing the term I was reading a Marcia Muller novel more than twenty years ago. I recall thinking, “I like that idea.”

The idea wasn’t new, but the way it was used resonated with me. I’m fortunate to have family, friends, and instructors who filled this role then, and now.

No one can exist in a vacuum and flourish. We need other people.

Perhaps the most tragic examples that illustrate this are the more than 153 million children worldwide living in orphanages. Institutional life isn’t compatible with forming strong attachments with a primary caregiver.

Researcher Nathan Fox found that young children in institutionalized settings have reduced grey and white matter in their brains. His Child Development Lab at the University of Maryland has ongoing studies with children in Romanian orphanages.

Neglect is positively correlated “with significant cognitive delays, increased risk for psychological disorders, and stunted physical growth.” Early interventions can reverse some and possibly all of these negative effects.

We need people. Not just any people, but supportive, life-affirming people.

This might seem obvious, but I’ve met hundreds of people throughout the United States who know this but don’t take steps to ensure it for themselves.

My father used to say, “If someone is an albatross around your neck, kick’em to the curb.” (That’s a bit of mixed imagery, but you get the point.)

When you think of a “touchstone,” it’s usually a person with whom you can share your deepest desires, hopes, fears, frustrations, and dreams. This is your “go-to” cheerleader/accountability partner.

It’s Buffy and Angel, Laverne and Shirley, Fonzie and Richie — wait, let me give a few contemporary examples. How about Bella and Edward, Patrick and Spongebob, or Aphmau and Aaron?

Who are your touchstones?

If you don’t have these kinds of people in your life right now, what can you do?

I’m borrowing this approach from all those dating websites. They always ask what kind of person you’re searching for in a mate. Well, this isn’t any different.

Start identifying the traits you’d like for the people you want in your life. You can do this through journaling. Yes, you want the person to be supportive and encouraging, but what else? How would you like them to do this? How do you want them to give you feedback?

We all know that what we focus on gets our attention. Finding your tribe and touchstone takes effort, time, and attention.

It also takes courage to move away from your core group when you realize they’re a weight not worth lifting. Leaving my dojang and all the people I enjoyed training with was a difficult decision, but it was the right one.

I ran into my former instructor from that school not so long ago. He gave me an interesting update that he believed might open the door for my return. We’ll see.

Touchstones are your inner circle. They look after you, mentally and sometimes physically. They challenge and uplift you. In colloquial terms, “They’ve got your back.”

Who’s got your back?

1000 push-ups in a day challenge

by KDMiller | Habit formation, Personal Development

Learn how an endurance challenge like doing 1000 push-ups can increase your productivity

1000 push-ups a day does a body good! — 1000 push-ups a day? You got this!

Completing 1000 push-ups in a day isn’t for the faint of heart. It’s an endurance exercise that takes time and patience — much like other endurance activities do.

Today, I’d like you to check out my article on Better Humans. It outlines how I completed the 1000 push-ups challenge, the benefits of endurance challenges, and how to set up your plan, including ‘if, then’ scenarios.

The number one suggestion I can give you is this: Surround yourself with supportive people. Whenever we want to make a change, we need other people to help us. We’re social creatures. On those days when you don’t feel like going nose-to-the-floor, a pep talk from your peeps will motivate you.

The article also discusses how to handle the naysayers. You’ll want them on board or off your boat as soon as possible. If they’re an albatross around your neck, cut them off, and send them swimming. The key word here is ‘boundaries.’

Think of it this way:

Chloro Phil, Dirty Dancing via YouTube

Your endurance challenge doesn’t have to be push-ups. The point is to pick something you’ll commit to doing every day. Visit the challenges page to see three other ideas.

My second suggestion is this: Track your progress. This also keeps you motivated. In the article you’ll see how I did this, and read about the Panda Planner that I use now. Though, I did start tracking my pull-ups on the wall again.

How do endurance activities increase your productivity? You become more consistent in what you’re doing. That consistency trickles into other domains of your life. You get results.

Enjoy the article and be sure to let me know what you decide to do!

Go the Distance

by KDMiller | Habit formation, Personal Development

Challenges, especially of the larger variety help us build resilience. In the spirit of helping you (and me, I’m not going to lie) do that, I’ve created four challenges for you to try. I’ve done each one, and have already started a new one — training for a 1/2 marathon.

You can review and accept a challenge here. Be sure to leave a comment introducing yourself!

Good luck! I look forward to helping you meet your goals!

Kori

Flow: A state of mind

by KDMiller | Happiness and Well-being, Personal Development

If you always put limit on everything you do, physical or anything else. It will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them.
Bruce Lee

When do you feel strongest mentally? Is it while you’re watching TV?

Probably not.

Most of us feel strongest when we’re being challenged. When our skills are being tested and the goal is just outside our reach, but we believe it’s attainable, we feel strong.

Every step we take moves us closer to conquering the test. Our confidence grows. Our understanding of whatever we’re trying to tackle increases.

We stumble, but we see a breakthrough on the horizon, and it’s not too far. We keep going. This is flow.

It’s timeless.

Will there be plateaus as Bruce Lee said? Yep.

But if you want to experience a greater sense of well-being and happiness, you’ll find ways to reach, and stay in, flow.

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