Rationality refers to the quality of being based on or in accordance with reason or logic. Bounded rationality is the idea that humans lack the brain power to make fully rational choices when faced with tough decision-problems, especially when there’s not enough time or information to do the necessary calculations. Instead, humans rely partly on mental shortcuts - “heuristics” - to guide decision-making. This generally works out fine – perhaps not perfect but good-enough.
For example, the affect heuristic allows people to make quick and efficient decisions without having to conduct an extensive search for information. It’s the equivalent of “going with your gut”, in which feelings – such as fear, desire, pleasure, and trust – guide the decision-making process, from sizing up a person or situation to taking action (or not). The gut manages this job fairly well.
But bounded rationality fails spectacularly when untethered to something real - that is, unless it is grounded in the real world and is not pure fantasy. After all, paranoids, schizophrenics and conspiracy theorists can do bounded rationality very well. In fact, many of these individuals argue their case with impressive logic and eloquence. And yet they are standing on shifting sands, not solid ground. If such ungrounded rationality characterized homo sapiens in general, our precious species would never have existed.
Which leads me to the conclusion that most people track reality reasonably well. And if we want to better understand those with whom we disagree, an essential step is to seek common ground.