empiricism in herbert simon : Administrative Behavior within the evolution of the Models of bounded and Procedural rationality

This paper contextualizes Simon’s book, Administrative Behavior, within the evolution of his ideas arguing, contrary to what some have posited, that the common element that unites this book with the rest of Simon’s work is not the criticism of the classical approach, but an epistemological frame, based on an empirical methodology. This empiricism is the element that remained constant during his career and led him to introduce psychological factors when explaining the behavior of economic agents under his models of bounded and procedural rationality. KEywORDS: Herbert A. Simon; bounded rationality; procedural rationality; empiricism. JEL Classification: A11; D01; B52; B31; D21. * Department of Languages, Literatures and Cultures, University of North Carolina at Greensboro and Departmento de Lógica, Historia y Filosofía de la Ciencia, Universidad Nacional de Educación a Distancia (UNED). E-mail: a_hortal@uncg.edu. Submitted: 17/September/2015; Approved: 15/ August/2016. Brazilian Journal of Political Economy, vol 37, no 4 (149), pp 719-733, October-December/2017 719 http://dx.doi. org/10.1590/0101-31572017v37n04a04 Revista de Economia Política 37 (4), 2017 • 720 Brazilian Journal of Political Economy 37 (4), 2017 • pp. 719-733 INTRODUCTION In light of the importance that Herbert Simon and his concept of bounded rationality (BR) have been acquiring among behavioral economists in general (Geiger, 2015, p. 2) and, as an example, in regard to nudge theory (Muramatsu and Fonseca, 2012) and other branches of behavioral economics in particular, this paper aims at contextualizing the role of Herbert Simon’s book Administrative Behavior (AB), within the framework of the evolution of his ideas. Some authors see in this first work a strong criticism of classical and neoclassical elements. A different position is argued here. Simon’s first book, far from being extremely critical and opposed to mainstream economics, did share some of its fundamental ideas. The common element that unites AB with the rest of Simon’s work is not the criticism of the classical approach, but an epistemological frame, based on empirical methodology, which contributed in the introduction to psychological factors in the explanation of economic agents. Some authors, like Gustavo Barros, mentioned this disparity (2010, p. 457). This paper adds to that extent that what was constant during his research career and what pushed Simon to a complete rejection of the classical paradigm years later was this philosophical empiricism. This empirical approach, among other factors, was the main foundation of his models of bounded and procedural rationality. Simon’s constant use of a positivist approach, not only made him the epicenter of this epistemological viewpoint in public policy (Cruise, 1997), but also helped him to develop other concepts (satisficing, etc.) that eventually introduced a new paradigm in rational theory within the larger context of a behavioral revolution (Mingus, 2007; Geiger, 2015). This new paradigm was yet to be seen in Simon’s first book. In the history of social sciences, economics and management some authors (Dequech, 2001; González, 2004; Brown, 2004; Sent, 2005; Callebaut, 2007, p. 77) have written about the importance of Herbert Simon in criticizing the standard (classical and neoclassical) economic model, even considering him a point of inflexion in how the theory has changed when describing and explaining economic decisions. Many of them pay little or no attention to the evolution of this criticism. Other authors (Barros, 2010) have argued that the first writings of Simon are in line with the neoclassical tradition in economy, as opposed to those written later, which are centered on the idea that neoclassic postulates are unrealistic. The objective of this article is to contextualize AB within the epistemological evolution of his research, analyzing some of the elements of his criticism of mainstream economics that were present then, while shedding light on other elements that were absent. This will clarify the role of his first book within the general scope of his empirical philosophy, the true and constant foundation of his theoretical building that gave birth to the models of bounded and procedural rationality, fundamental premise of behavioral economics. This concept, which appeared for the first time in his book Models of Man (Simon, 1957) and its parallel concept of “procedural rationality” (Simon, 1976) were coined by Simon to criticize the theory of rationality of neoclassical econom-