Simon, Herbert A.

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock… read more.

Updated: Aug 20, 2021

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In 1978 Simon was awarded the Nobel Prize in Economics for his contributions to mathematics, organization behaviour, computer science and economics. Following a doctorate in political science at the University of Chicago, he went to the Bureau of Public Information at the University of California. He then moved in 1949 to Carnegie Mellon as professor of computer science and psychology. Early in his career Simon challenged the view that the cor­poration was a profit-maximizing, rational entity. He argued that decisionmaking was based on limited information, making it necessary to plan for the short term and/ or to restrict analysis to one activity. In his book Administrative Behavior (1947) Simon argued that the corporation is an adaptive system, seelcing satisfactory alternatives to a series of problems. Corporations were therefore directed to ‘satisficing‘ behaviour, not strict profit maximization. His other publications include The New Science of Management Decision (1960), Models of Man (1977) and Models of Bounded Rationality and Other Topics in Economics (1982).

Reference: The Penguin Dictionary of Economics, 3rd edt.