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Reconsidering Herbert A. Simon’s Major Themes in Economics: Towards an Experimentally Grounded Capital Structure Theory Drawing from His Methodological Conjectures

Author

Listed:
  • Edgardo Bucciarelli

    (University of Chieti-Pescara)

  • Nicola Mattoscio

    (University of Chieti-Pescara)

Abstract

Drawing inspiration from a renowned critique of standard economics moved by Simon (Q J Econ 69(1):99–118, 1955, Am Econ Rev 49(3):253–283, 1959), the authors of this paper develop a novel experimental design moving beyond the hypothesis-testing framework traditionally based on the use of deductive logic, while introducing a new way suitable for addressing the problem of understanding the impact of fluctuations and uncertainty in business decision-making. As claimed in the paper, this can be achieved by adopting an abductive approach to research design that incorporates an experimental methodology based on an original computerised real effort task, so that to explore firms—and other forms of business organisations—serving as experimental incubators in the market process, pursuing a range of economic enquiries more adherent to real world business applications. Among these enquiries, in this paper the authors focus on firms’ capital structure decisions in order to attempt to advance existing knowledge on the topic of experimental business research within the framework of economics.

Suggested Citation

  • Edgardo Bucciarelli & Nicola Mattoscio, 2021. "Reconsidering Herbert A. Simon’s Major Themes in Economics: Towards an Experimentally Grounded Capital Structure Theory Drawing from His Methodological Conjectures," Computational Economics, Springer;Society for Computational Economics, vol. 57(3), pages 799-823, March.
    • Handle: RePEc:kap:compec:v:57:y:2021:i:3:d:10.1007_s10614-018-9808-7
    DOI: 10.1007/s10614-018-9808-7
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    More about this item

    Keywords

    Experimental economics; Design research; Abduction; Iterative algorithm; Data-driven discovery; Corporate finance;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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