There are seven assumptions about rationality. The problem is clear and unambiguous. A single, well-defined goal is to be achieved. All alternatives and consequences are known. Preferences are clear.
Preferences are constant and stable.
No time or cost constraints exist. Final choice will maximize economic payoff. B. Limits to rationality. Unfortunately, most decisions that managers face don't meet all the tests of rationality. Studies into the decision-making process have uncovered some important insights.