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Rationality, Imagination and Intelligence: Some Boundaries in Human Decision-Making

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  • Augier, Mie
  • Kreiner, Kristian

Abstract

This paper explores the concept of "bounded rationality" by contrasting it to notions of rationality that are not bounded. It mainly attempts to deepen understanding of the concept by outlining and comparing different versions of "bounded rationality", in this case the versions of Herbert A. Simon, George Shackle and James G. March. Simon is the "father" of procedural rationality, at least in modern times. His ideas, and those of his Carnegie School colleagues, about bounded, or limited, rationality enable recognition of the importance of behavioral and cognitive incompleteness. Shackle was a loner in economics because he took seriously the importance of time, not in a mathematical but in a psychological sense. The paper will exploit his ideas to argue the importance of imagination as an integral part of human decision-making. Finally, March is known for his more irrational models of human decision-making. The pursuit of intelligence in the longer run requires us occasionally to betray the canons of rationality in the short run. These three sets of ideas lead to different versions of bounded rationality: procedural, aesthetic and retrospective rationality respectively. Copyright 2000 by Oxford University Press.

Suggested Citation

  • Augier, Mie & Kreiner, Kristian, 2000. "Rationality, Imagination and Intelligence: Some Boundaries in Human Decision-Making," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(4), pages 659-681, December.
    • Handle: RePEc:oup:indcch:v:9:y:2000:i:4:p:659-81
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    Citations

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    Cited by:

    1. Beckert, Jens, 2011. "Imagined futures. Fictionality in economic action," MPIfG Discussion Paper 11/8, Max Planck Institute for the Study of Societies.
    2. Sergeeva, Anastasia & Bhardwaj, Akhil & Dimov, Dimo, 2021. "In the heat of the game: Analogical abduction in a pragmatist account of entrepreneurial reasoning," Journal of Business Venturing, Elsevier, vol. 36(6).
    3. Hanoch, Yaniv, 2002. ""Neither an angel nor an ant": Emotion as an aid to bounded rationality," Journal of Economic Psychology, Elsevier, vol. 23(1), pages 1-25, February.
    4. Wenzel, Matthias & Stjerne, Iben Sandal, 2021. "Heuristics-in-use: Toward a practice theory of organizational heuristics," Technological Forecasting and Social Change, Elsevier, vol. 164(C).
    5. Alain Marciano, 2006. "David Hume's model of man: Classical political economy as “inspired” political economy," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 369-386.
    6. Lee Pugalis & Anna Round & Tony Blackwood & Lucy Hatt, 2015. "The entrepreneurial middle ground: Higher education entry decisions of aspiring entrepreneurs," Local Economy, London South Bank University, vol. 30(5), pages 503-519, August.
    7. Patalano Roberta, 2003. "Beyond rationality: images as guide-lines to choice," CESMEP Working Papers 200305, University of Turin.
    8. Alexandre Chirat & Michaël Assous & Olivier Brette & Judith Favereau, 2022. "Herbert Simon’s experience at the Cowles Commission (1947–1954)," EconomiX Working Papers 2022-11, University of Paris Nanterre, EconomiX.
    9. Richard Nelson, 2013. "Demand, supply, and their interaction on markets, as seen from the perspective of evolutionary economic theory," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 17-38, January.
    10. Caroline Gerschlager, 2012. "Agents of change," Journal of Evolutionary Economics, Springer, vol. 22(3), pages 413-441, July.
    11. Roberta Patalano, 2012. "Imagination and Perception as Gateways to Knowledge: The Unexplored Affinity between Boulding and Hayek," Chapters, in: Richard Arena & Agnès Festré & Nathalie Lazaric (ed.), Handbook of Knowledge and Economics, chapter 6, Edward Elgar Publishing.

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