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Economics and Rationality of organizations: an approach to the work of Herbert A. Simon

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  • Estrada, Fernando

Abstract

One of the main achievements of Herbert A. Simon in organizational theory is analytically evaluating the psychology of individual and collective behavior thus opening the ground for further research D. Kahneman, and T. Schelling. This article provides an assessment of the contributions of Simon's theory of organizations with special emphasis on the criterion of bounded rationality. It is interpreted Simon's criticism of the orthodox version of organizational bureaucracy and extends his analysis to the new institutional economics.

Suggested Citation

  • Estrada, Fernando, 2010. "Economics and Rationality of organizations: an approach to the work of Herbert A. Simon," MPRA Paper 21811, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21811
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    References listed on IDEAS

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    1. Peter E. Earl (ed.), 2001. "The Legacy of Herbert Simon in Economic Analysis," Books, Edward Elgar Publishing, volume 0, number 1201.
    2. Simon, Herbert A., 2000. "Barriers and bounds to Rationality," Structural Change and Economic Dynamics, Elsevier, vol. 11(1-2), pages 243-253, July.
    3. Langlois, Richard N., 2003. "Cognitive comparative advantage and the organization of work: Lessons from Herbert Simon's vision of the future," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 167-187, April.
    4. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September.
    5. Brink, Helge, 1994. "Models of my life : Herbert A. Simon, (Basic Books, New York, NY, 1991) $26.95, 415 pp," Journal of Economic Dynamics and Control, Elsevier, vol. 18(5), pages 1045-1049, September.
    6. Frantz, Roger, 2003. "Herbert Simon. Artificial intelligence as a framework for understanding intuition," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 265-277, April.
    7. Marco Novarese & Salvatore Rizzello, 2003. "Satisfaction and Learning: an experimental game to measure happiness," Microeconomics 0306004, University Library of Munich, Germany.
    8. Simon, Herbert A., 1997. "On the possibility of accurate public prediction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(2), pages 127-132.
    9. Kaufman, Bruce E., 1999. "Emotional arousal as a source of bounded rationality," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 135-144, February.
    10. Augier, Mie & March, James G., 2003. "The economic psychology of Herbert A. Simon: Introduction to a special issue," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 135-141, April.
    11. Hayek, F. A., 1996. "Individualism and Economic Order," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226320939, October.
    12. Martin Beckenkamp, 2004. "Is there an optimization in bounded rationality? The ratio of aspiration levels," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2004_15, Max Planck Institute for Research on Collective Goods.
    13. Minkes, A. L. & Foxall, Gordon R., 2003. "Herbert Simon and the concept of dispersed entrepreneurship," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 221-228, April.
    14. Simon, Herbert A., 1984. "On the behavioral and rational foundations of economic dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 35-55, March.
    15. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
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    17. Sent, Esther-Mirjam, 2004. "The legacy of Herbert Simon in game theory," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 303-317, March.
    18. Massimo Egidi & Luigi Marengo, 2002. "Cognition, institutions, near decomposability: rethinking Herbert Simon's contribution," CEEL Working Papers 0206, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    19. Schwartz, Hugh, 2002. "Herbert Simon and behavioral economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(3), pages 181-189.
    20. Herbert A. Simon, 2001. "¿Por qué la administración pública?," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 3(4), pages 119-122, January-J.
    21. Simon, Herbert A., 1982. "The rural-urban population balance again," Regional Science and Urban Economics, Elsevier, vol. 12(4), pages 599-606, November.
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    More about this item

    Keywords

    Economic theory; organizations; Herbert Simon; bounded rationality; Kahneman; Schelling; decision theory.;
    All these keywords.

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • A1 - General Economics and Teaching - - General Economics
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • G3 - Financial Economics - - Corporate Finance and Governance
    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • A10 - General Economics and Teaching - - General Economics - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D0 - Microeconomics - - General
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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