Beyond Bounded Rationality: Controlled Irrationality and the Dynamics of Behavioral Control

This paper proposes Controlled Irrationality as a unified theoretical and empirical framework for modeling human and collective decision processes. Whereas bounded rationality emphasized cognitive limits within a rational structure, Controlled Irrationality reverses this order: it treats irrational behavior as the default substrate and rationality as a meta-cognitive control mechanism that governs feedback among subrational routines. Integrating evidence from cognitive neuroscience, behavioral economics, and institutional analysis, the paper formalizes this process as a recursive control loop stabilized by five interacting domains—economic (A), psychological (H), institutional (I), participatory (J), and cultural (C). These stabilizers jointly define a society’s capacity for self-correction. A composite Controlled Irrationality Index (CII) is introduced to measure institutional resilience and feedback efficiency using cross-national survey data (WVS, EVS, V-Dem). Empirically and conceptually, the framework bridges rational-choice and behavioral paradigms. It redefines governance as the control of imperfect agents within adaptive bounds rather than the pursuit of ideal rationality. The result is a dynamic systems model of decision-making that connects micro-level cognition to macro-level stability.