A Critique of Classical Rationality:Simon’s Bounded Rationality Approach

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Authors

1 دانشیار گروه اقتصاد دانشگاه اصفهان

2 دانشجوی کارشناسی ارشد اقتصاد دانشگاه اصفهان

3 دانشجوی کارشناسی ارشد اقتصاد دانشگاه یزد

Abstract

Rationality is more a philosophical, social and psychological concept than merely an economic one, and that is why we face a vast variety of theories of rationality. One of these theories is the common approach to the science of economy which considers rationality as an unchangeable personal interest-based presumption. Manu criticisms have been presented against full rationality one which is the bounded or limited rationality proposed by Herbert Simon. Criticizing full rationality approach in the classical economy in which ideality is absolutely summed up in achieving the goal, Simon considers decision-making not as a process fully chosen by the individual with complete knowledge, but as process affected by various types of external and internal limitations. This process leads to making a choice in three stages of searching, assessment, and decision-making. The decision eventually made by the individual is not optimal, but only satisfies him enough to stop searching and assessing. As opposed to the full rationality approach, the individual’s satisfaction with his choice is not only because of the realization of personal interest; it also leads to the decision-maker’s ideological, social and individual satisfaction at the same time. Though Simon’s methodology seems simple and evident, the outcome of his theory seems more important than the method. If full rationality, which is the basis of theory of economy, is not capable of corresponding to the reality, it can basically be concluded that the common theory of economy is not able to know the society and present applicable recommendations to solve the society’s problems.
 
 

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References

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Journal of Iranian Economic Issues
Volume 3, Issue 2
September 2017
Pages 71-93

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History

  • Receive Date: 03 October 2016
  • Revise Date: 27 October 2016
  • Accept Date: 12 December 2016

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