Question

Provide examples from your personal life for each of these three scenarios: •You acted rationally. Very briefly explain your choice. •You confronted bounded rationality. How did you resolve this situation? •You had to choose between self-regarding and other-regarding preferences. Briefly explain.

Answer 1

Rationality is the reasonable act which protects self-interest and other’s interest.

Example: My mobile phone was not working and I took it to nearby repairing centre. The person in-charge, Mr. A, saw the damage and charged me $100 for making it ready. Although it was not required but I paid in advance and returned back home. Mr. A assured me that the phone would be repaired and delivered next day. I visited the centre in the next day, hoping that I would be receiving the phone in proper order; but Mr. A showed me more complication in the instrument and again assured me delivering in order the next day; I visited subsequently but the person told me that he was fighting with the phone but still not able to correct the damage. Again he took time for few days. In this way two weeks had gone but the phone was not repaired. During this course I had seen his effort and dedication about his duty. He told me to take the refund of advance money. I accepted but couldn’t able to take the whole $100; I took $80 and left for him $20 for his hard labor. I think it protects both self-interest and Mr. A’s interest.