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Realism and comprehension in economics: A footnote to an exchange between Oliver E. Williamson and Herbert A. Simon

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  • Augier, Mie
  • March, James G.

Abstract

The correspondence between Herbert Simon and Oliver Williamson reveals a history of disagreement ultimately resolved by a reinstatement of mutual respect and agreement. On the surface, the disagreements concern questions about the appropriate trade-offs between realism and comprehension in economic theory, on the extent to which the theory should be based on realistic behavioral assumptions. At another level, however, the disagreements expose a different issue: Whether the sacrifices of realism involved in seeking comprehensible theory are to be experienced as unfortunate but necessary costs or as agonizing falls from grace that may be forgiven but only if accompanied with pain and contrition.

Suggested Citation

  • Augier, Mie & March, James G., 2008. "Realism and comprehension in economics: A footnote to an exchange between Oliver E. Williamson and Herbert A. Simon," Journal of Economic Behavior & Organization, Elsevier, vol. 66(1), pages 95-105, April.
    • Handle: RePEc:eee:jeborg:v:66:y:2008:i:1:p:95-105
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    References listed on IDEAS

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    1. March, James G., 1992. "The war is over and the victors have lost," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 21(3), pages 261-267.
    2. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    3. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
    4. Williamson, Oliver E., 1996. "Transaction cost economics and the Carnegie connection," Journal of Economic Behavior & Organization, Elsevier, vol. 31(2), pages 149-155, November.
    5. Williamson, Oliver E, 1988. "The Logic of Economic Organization," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 65-93, Spring.
    6. William M. Dugger, 1996. "The Mechanisms of Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 30(4), pages 1212-1216, December.
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    Cited by:

    1. Gigi Foster, 2018. "Towards a living theoretical spine for (behavioural) economics," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(1), pages 75-81, March.
    2. Augier, Mie, 2013. "The early evolution of the foundations for behavioral organization theory and strategy," European Management Journal, Elsevier, vol. 31(1), pages 72-81.
    3. Peter Earl, 2012. "Behavioural Theory," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 10, Edward Elgar Publishing.

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