The Problem With Bounded Rationality


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The Problem With Bounded Rationality

Show simple item record Foss, Nicolai J. 2009-08-20 2009-08-20T11:58:23Z 2009-08-20T11:58:23Z 2009-08-20
dc.identifier.isbn 8778731143
dc.description.abstract I discuss and compare alternative approaches to integrating bounded rationality with the theory of economic organization, concentrating on the organizational capabilities approach, which is strongly influenced by the works of Nelson and Winter, organizational economics, particularly transaction cost economics, and, finally, a small subset of the literature on biases to judgment and cognition. I argue that, contrary to the conventional view, both the organizational capabilities approach and transaction cost economics treat bounded rationality rather “thinly,” the former being in actuality more taken up with organizational routines than individual boundedly rational behavior, the latter only invoking bounded rationality to the extent that it helps explaining incompleteness of contracting. The rich literature on cognitive biases, etc. suggests a “thick” approach to bounded rationality that may be helpful with respect to furthering the theory of economic organization. Examples pertaining to the internal organization of firms are provided. en_US
dc.format.extent 35 s. en_US
dc.language eng en_US
dc.publisher DRUID en_US
dc.relation.ispartofseries DRUID Working Paper;01-15
dc.title The Problem With Bounded Rationality en_US
dc.type wp en_US
dc.accessionstatus modt09aug20 liga en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Danish Research Unit for Industrial Dynamics en_US
dc.contributor.departmentshort DRUID en_US
dc.contributor.departmentuk Danish Research Unit for Industrial Dynamics en_US
dc.contributor.departmentukshort DRUID en_US
dc.idnumber 8778731143 en_US Frederiksberg en_US
dc.publisher.year 2001 en_US
dc.title.subtitle On Behavioral Assumptions in the Theory of the Firm en_US

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