This paper provides an overview of the work of Herbert Simon and his ideas about rational decision making. By his own standards, Simon is an economist who works in the tradition of Adam Smith and Alfred Marshall. The central theme in Simon’s research is how human beings organize themselves in...

This article evaluates Herbert A. Simon’s contribution to organization theory, placing special emphasis on the criterion of bounded rationality. Simon’s criticism of the orthodox version of organizational bureaucracy is interpreted and his analysis is extended to institutional economics. One...

Economics places a high premium on completeness of explanation. Typical general-equilibrium accounts of economic phenomena are preferred to partial equilibrium accounts on the ground that important interactions are necessarily omitted in the latter. A similar preference for microfoundational...

Economist Frank H. Knight (1885--1972) is commonly credited with defining the distinction between decisions under ``risk'' (known chance) and decisions under ``uncertainty'' (unmeasurable probability) in his 1921 book Risk, Uncertainty and Profit. A closer reading of Knight (1921) reveals a host...

This article describes the emerging subfield known as behavioral economics, which borrows from psychology, empirically tests assumptions used elsewhere in economics, and provides theories that aim to be more realistic and closely tied to experimental and field data. Highlights from the...

Herbert Simon disseminated his bounded rationality approach in his vast academic production. The recognition of the complex environment and the cognitive limits led him to study about the use of heuristics in the decision-making. Around this idea, a new path to the study of human decisions has...

The debate over the Cobb-Douglas production function has been raging ever since the mathematician Charles Cobb teamed up in 1928 with the economist Paul Douglas and developed this famous model of aggregate production and distribution. This article presents a heretofore unpublished exchange in...

This article reconstructs Franco Modigliani’s and Herbert Simon’s close collaboration over the 1950s on implementation of a decision theory under uncertainty that partly contributed to the genesis of behavioral economics and rational expectations theory. Their collaboration reveals how the...

In innovation, the role of aesthetics is important, possibly paramount, but this factor is not reflected in mainstream innovation theory and research. The paper suggests that aesthetics, supported by serendipity, imagination, and creativity constitute the core, i.e., the “soul” of...