Author(s)

Yue Hu,Zhao-hui Chen

Corresponding Author

Yue Hu

Abstract

This paper argues that bounded rationality is more in line with real-life situations than entirely rational. From the perspective of bounded rationality, by sorting out the influencing factors on the strategy selection, and taking decision makers as the center point, the influencing factors are divided into internal factors and external factors. Based on the theory of bounded rationality, this paper also reviews the influence which is finite rationality’s different degrees of realization on the strategy choice. Through literature reading and systematic review, this paper proposes that the influencing factors of strategy choice include the following, the environment in which the decision maker is located, the sunk cost, the cognitive ability of the decision maker, and the preference of the decision maker, as well as the difference in the realization degree of bounded rationality of decision makers.

Keywords

Bounded rationality, entirely rational, strategic choice, influencing factors