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The Rhetorical Dimensions of Bounded Rationality: Herbert A. Simon and Organizational Economics

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Nicolai J. Foss

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Abstract

I discuss the rhetorical dimensions of bounded rationality in two different, yet related, contexts, namely in the practice of organizational economists and in Herbert Simon’s key attempts to persuade economists to take bounded rationality seriously, his Ely lecture and his Nobel Prize lecture. I discuss various reasons why Simon failed to convince his contemporaries, among other things, the absence of clear definitions of bounded rationality and heuristics for incorporating it into economic models. Simon’s failures in these respects help explaining the very modest, and mainly “rhetorical,” use of bounded rationality in the works of organizational economists.

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Paper provided by Department of Industrial Economics and Strategy, Copenhagen Business School in its series IVS/CBS Working Papers with number 2002-07.

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Handle: RePEc:ivs:iivswp:02-07

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Related research
Keywords: Herbert Simon; bounded rationality; organizational economics; rhetoric.;

Find related papers by JEL classification:
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
M1 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration

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