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This paper proposes Constrained Rationality, a formal qualitative goals and constraints reasoning framework for single and multi agents to analyze and rationalize about strategic decisions/conflicts. The framework suggests bringing back the strategic decision making problem to its roots: reasoning about options/alternatives, not to satisfy a set of preferences, but rather to satisfy the explicitly stated strategic and conflicting goals an agent has, given the internal and external complex and conflicting realities/constraints the agent has. The paper analyzes the relations among goals and constraints, how value property labels for goals (such as their achievement or prevention levels) propagates through these relations, and proposes a set of propagation rules and an algorithm to calculate the final value labels for goals at any point of time. The paper also presents some preliminary experimental results on using the algorithm to reason about a business strategic decision making scenario.