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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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    File URL: https://mpra.ub.uni-muenchen.de/21811/1/MPRA_paper_21811.pdf
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    References listed on IDEAS

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    1. Augier, Mie & March, James G., 2002. "A model scholar: Herbert A. Simon (1916-2001)," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 1-17, September.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Simon, Herbert A., 2000. "Barriers and bounds to Rationality," Structural Change and Economic Dynamics, Elsevier, vol. 11(1-2), pages 243-253, July.
    7. Marco Novarese & Salvatore Rizzello, 2003. "Satisfaction and Learning: an experimental game to measure happiness," Microeconomics 0306004, EconWPA.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. Nicolai J. Foss, "undated". "Simon's Grand Theme and the Economics of Organization," IVS/CBS Working Papers 2001-9, Department of Industrial Economics and Strategy, Copenhagen Business School.
    13. 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.
    14. Simon, Herbert A., 1982. "The rural-urban population balance again," Regional Science and Urban Economics, Elsevier, vol. 12(4), pages 599-606, November.
    15. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September.
    16. 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.
    17. 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.
    18. 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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    More about this item

    Keywords

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

    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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