Herbert Simon’s bounded rationality decomposed the optimizing economic man
Evidence
Neoclassical economists, however, generally shied away from interdisciplinary collaboration on human behavior. An exception to the rule were members of the Cowles Commission at the University of Chicago and protagonists of early consumers’ research, such as George Katona. Having already advised the Ford Foundation on its program for the behavioral sciences in particular, Herbert A. Simon formulated a research agenda that resembled Schmölders’s economic behavioral research. Having worked on theories of organization and administration, in 1955 Simon suggested to “substitute for ‘economic man’ or ‘administrative man’ a choosing organism of limited knowledge and ability. This organism’s simplifications of the real world for purposes of choice introduce discrepancies between the simplified model and the reality; and these discrepancies, in turn, serve to explain many of the phenomena of organizational behavior.” Simon wanted to develop a theoretical model of “rational behavior that is compatible with the access to information and the computational capacities that are actually possessed by organisms, including man, in the kinds of environments in which they exist.” — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 331
Categorization
- XREF: Connects to the wider behavioral economics story and Simon’s separate trajectory from mainstream neoclassical economics; also relevant to the reader’s map of internal diversity within economics schools. — connects to: Herbert Simon defined attention as the scarce resource that information consumes. — Yves Citton, The Ecology of Attention, 35; Rational expectations theory was formulated as a direct rebuttal to Simon’s bounded-rationality critique — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 170; A German economist proposed grounding economics in empirical behavioral sciences rather than abstractions — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 328 (+2 more)
Broader Connections
- Human rationality is bounded by memory and computational limits and often violates rational maxims
#expands(0.92) — John T. Jost and Jim Sidanius, Political Psychology, 2408 - Objections to rational choice theory shifted from emotional to cognitive grounds after Simon.
#expands(0.80)