'Rational choice theory' and 'Bounded rationality theory'
- Rational choice theory thinks of people as economic super-men and women, also known as homo economicus. Economists use this theory to think about what 'economic man' would do, then add up the actions of billions of people to make models about how the economy works.
- Bounded rationality theory looks at the ways we don't or can't act like homo economicus. It sees people as rational but limited by the information they possess and their ability to process that information.
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