Simon, Herbert Alexander (1916–2001)

US social scientist, computer scientist, and economic psychologist. Much of Simon's career was focused on attacking the economist's concept of rational behaviour. He was awarded the Nobel Prize for Economics in 1978 for the study of administrative behaviour and decision-making in large organizations.

Economic action, argued Simon, is not rational, but rather ‘bounded’ by our limited cognitive abilities and by sheer ignorance of the uncertain future. Economic agents are unable to ‘maximize’ their self-interest even if they want to. Hence, they ‘satisfice’, that is, they do as well as possible to achieve certain aspiration levels and they gradually adjust these levels upwards or downwards, depending on whether outcomes exceed or fall short of the original target. The playing of chess is one of Simon's favourite examples: the problem of designing chess-playing computers is precisely the fact that almost every move in a game of chess involves millions of alternative possibilities and human beings do not decide on the next move by examining all these possibilities in turn but instead seize on promising patterns and lines of play. Likewise, rational economic conduct depends on information-saving rules of thumb. Throughout his career, he placed considerable emphasis on the need to ground economics in a realistic rather than a fictional conception of human behaviour.

Simon was born in Milwaukee, Minnesota. He received his BA in 1936 and his PhD in 1943, both from the University of Chicago. His first post was that of a research assistant at the University of Chicago from 1936 to 1938. He then became a staff member of the International City Managers' Association. This was followed by a directorship of Administrative Measurement Studies at the Bureau of Public Administration of the University of California during the years 1939–42. He joined the teaching staff of the Illinois Institute of Technology in 1942, becoming professor of political science in 1947. In 1949 he moved to Carnegie Mellon University, first as professor of administration and psychology (1949–55), and later as professor of computer science and psychology, a post which he held until retirement in 1988.

He was chair of the Board of Directors of the Social Science Research Council (1961–65), member of the US President's Scientific Advisory Committee (1968–71), chair of the Committee on Air Quality Control of the National Academy of Sciences (1974), chair of the Committee on Behavioral Sciences of the National Science Foundation (1975–76), winner of the Award for Distinguished Scientific Contributions of the American Psychological Association (1969), distinguished fellow of the American Economic Association (1976), and member of a large number of European professional associations.

His works include Administrative Behaviour (1947), Organizations (1958; with J C March), New Science of Management Decisions (1960), The Sciences of the Artificial (1969), Models of Bounded Rationality and Other Topics in Economic Theory (1982), and Economics, Bounded Rationality and the Cognitive Revolution (1992).