Bounded Rationality, one of the important ideas I agree on. We have limited knowledge about the facts about our environment and may be less about ourselves and the relation between those. As a human being, our rational side brings us today, the most prevalent and eminent species in the planet we live on. Even though, each passing day our knowledge is increasing, with respect to total knowledge -“omni-knowledge” -, it is limited. This is hypothesis and open to dispute. Let’s assume that’s a fact, for the sake of the proposal following. We have limited knowledge some of them learned, and some other from our own experience. The point we are making on this point is, the knowledge we are having especially that has the root of our history of experience is overrated. You have knowledge about a situation, for example “Every toss of a coin has the same probability of having head or tails”. You toss a coin and have a head. In the second toss, you more likely await it to become tail. In fact it has nothing to do with the previous experience you are having, it has the same probability to become head or tail. This was a simple example. When you bring this knowledge in more general terms, even if you have a knowledge about a situation, we tend to overrate our previous experience to be an important factor that we had a conclusion in a combination with the knowledge we have and the experience we had. The relation between knowledge and own experience is irrational. As a result in our decision we shadow our rationality through our own experiences.
Bounded Rationality and Overrating History of Experience