Rationality is a notion at the heart of both economics and business research. In their descriptive models, economists postulate that people behave rationally; and, in their normative models, many consultants and academics insist that business people ought to make rational decisions. But rationality is not an unambiguous concept, and it is certainly not uncontested as an economic postulate or a business goal. In this entry, a discussion of the meanings of rationality in economics is analysed in order to provide a framework for understanding the uses of – and limits to – the concept.