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Gerberg SajmonEconomist, Nobel Memorial Prize in Economics, 1978
Date of Birth: 15.06.1916
Country:  USA |
Content:
- Herbert Alexander Simon: A Pioneer in Behavioral Economics
- Municipalities and Organizational Behavior
- Carnegie Mellon University and Behavioral Economics
- Administrative Behavior and Models of Man
- Bounded Rationality
- Critique of Economic Imperialism and Formalization
- Awards and Recognition
- Legacy
Herbert Alexander Simon: A Pioneer in Behavioral Economics
Early Life and EducationHerbert Alexander Simon was born in Milwaukee, Wisconsin, on June 15, 1916. His father, an electrical engineer and patent attorney, instilled in him a keen interest in science and mathematics. Simon graduated from the University of Chicago in 1936 with a Bachelor's degree in political science.
Municipalities and Organizational Behavior
Simon's career began as a researcher in municipal administration in Chicago from 1936-38. His early research on the measurement of municipal activities caught the attention of the University of California and led to his appointment as the head of their research group in 1939.
In 1942, Simon joined the faculty of the Illinois Institute of Technology, where he taught political science. After completing his doctoral studies at the University of Chicago in 1943, he returned to the university's faculty.
Carnegie Mellon University and Behavioral Economics
In 1949, Simon moved to Pittsburgh to help establish the Graduate School of Industrial Administration at Carnegie Mellon University. He became the university's Richard King Mellon Professor of Computer Science and Psychology.
Simon's involvement in the development of computers and artificial intelligence had a profound influence on his thinking. Recognizing the limitations of human computational abilities, he sought to create a theory of choice that accurately reflected how real consumers and managers make decisions.
Administrative Behavior and Models of Man
In 1947, Simon published "Administrative Behavior," which expanded on Chester Barnard's ideas on motivation and decision-making. In 1957, he further developed these concepts in "Models of Man."
Building on the work of Thorstein Veblen, Simon criticized the theory of maximizing behavior in consumers and firms. He argued that individuals and organizations instead pursue a "satisficing" approach, aiming for a satisfactory level of outcomes rather than maximizing their goals.
Bounded Rationality
Simon introduced the concept of "bounded rationality," recognizing that human decision-making is limited by cognitive constraints. He argued that individuals can only consider a limited number of alternatives, and their choices are influenced by their aspirations and preferences.
Critique of Economic Imperialism and Formalization
Simon criticized the excessive use of formalization in economics, arguing that it can lead to overlooking important factors and ignoring the insights of other social sciences. He advocated for a more balanced approach that combined both formal and qualitative analysis.
Awards and Recognition
For his groundbreaking work in behavioral economics, Simon was awarded the Nobel Memorial Prize in Economic Sciences in 1978. He also received numerous other honors, including the National Medal of Science and the Presidencial Medal of Freedom.
Legacy
Herbert Alexander Simon's contributions to behavioral economics transformed the field and laid the groundwork for further research in cognitive psychology, economic psychology, and other related disciplines. His concept of bounded rationality has become a cornerstone of economic decision-making theory and has been applied to a wide range of fields. Simon's legacy as a pioneer in the behavioral approach to economic analysis continues to inspire researchers and policymakers around the world.
