Bounded Rationality in the Economics of Organization: Present Use and (Some)Future Possibilities

Nicolai J. Foss

Bounded Rationality in the Economics of Organization: Present Use and (Some)Future Possibilities

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Abstract

The way in which bounded rationality enters contemporary organizational economics theorizing is examined. It is argued that, as it is being used, bounded rationality is neither necessary nor sufficient for producing the results of organizational economics. It is at best a rhetorical device, used for the purpose of loosely explaining incomplete contracts. However, it is possible to incorporate much richer notions of bounded rationality, founded on research in cognitive
psychology, and to illuminate the study of economic organization by means of such notions. A number of examples are provided.

Original language	English
Place of Publication	Frederiksberg
Publisher	DRUID - Danish Research Unit for Industrial Dynamics
Edition	3rd revision
Number of pages	24
ISBN (Print)	8778731127
Publication status	Published - 2001

Series	DRUID Working Paper
Number	01-13

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DRUID Working Paper No 01-13Final published version, 124 KBLicence: CC BY-NC-ND

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