Question

Please explain bounded rationality using the Iranian Hostage Crisis.

Answer 1

Solution

Bounded rationality is the idea that rationality is limited when individuals make decisions by the tractability of the decision problem, the cognitive limitations of the mind, and the time available to make the decision. Decision-makers, in this view, act as satisficers, seeking a satisfactory solution rather than an optimal one.

To illustrate how a bounded rationality, indicator‐based, model designed to examine decision making in war applies to domestic political decisions, I analyze the timing of President Jimmy Carter's April 1980 decision to launch the Iranian hostage rescue. I argue that we can capture the primary domestic political forces that triggered this foreign policy shift by analyzing the rate of change of critical indicators monitored by a key group of presidential advisors.

This analysis allows us to construct a powerful, ex ante, model of decision making that accurately predicts the timing of Carter's decision to launch the hostage rescue. The proposed model is a more effective explanation of Carter's decision than other general explanations, and can be applied to other decision making situations.