Herbert Simon (1916–2001)

Who They Were

Herbert Simon (1916-2001) was an American social scientist of extraordinary range, working across economics, political science, psychology, and the new field of artificial intelligence. He earned his doctorate in political science and spent much of his career at Carnegie Mellon University, where he studied how people and organisations actually make decisions. Rejecting the assumption that economic actors optimise perfectly, he argued that real decision-makers face limits of information, time, and cognitive capacity. This made him an early forerunner of behavioural economics, decades before the field acquired that name. In 1978 he was awarded the Sveriges Riksbank Prize in Economic Sciences for his research into decision-making within economic organisations. Simon was also a founding figure in artificial intelligence and cognitive science, reflecting a career that repeatedly crossed disciplinary boundaries.

Key Contributions

Simon's best-known contribution is the idea of bounded rationality: because information, time, and mental resources are limited, people cannot evaluate every option and instead reason within practical constraints. In place of the perfectly optimising agent of standard theory, he proposed that decision-makers satisfice — searching until they find an option that is good enough rather than provably best. He developed these ideas in the study of administrative behaviour and organisations, showing how firms and institutions structure decisions among people who cannot be fully rational. This account of realistic, limited decision-making anticipated much of behavioural economics; his 1978 Nobel citation recognised his pioneering research into the decision-making process within economic organisations. Simon carried the same questions into artificial intelligence, modelling human problem-solving as a computational process.

On EconRecall

American polymath and forerunner of behavioural economics; won the 1978 economics Nobel for his work on decision-making in organisations. Play the games that feature Herbert Simon: