bounded rationality

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..

We look at the option of economic reforms when policymakers have present-biased preferences and may opt to discard information (maintain confidence) to offset disturbances from excess discounting. The decisions of policymakers and corporations are found to be interdependent. Confident policymakers perform welfare-improving reforms frequently, that raises the likelihood that firms ...

Although the economics of organization may have been one of the first areas where the notion of bounded rationality was systematically applied in theorizing, later developments do not seem to have gone significantly beyond Simon (1951), Cyert and March (1963), Marschak and Radner (1972) and Williamson (1975). If anything, the ...

The knowledge-based approach and organizational economics are usually seen as offering opposing approaches to the explanation of organizational phenomena. Relying on a taxonomic framework from the philosophy of science, we argue that many differences between these approaches are more apparent than real. Thus, many insights associated with the knowledge-based approach ...