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 languageEnglish
    Place of PublicationFrederiksberg
    PublisherDRUID - Danish Research Unit for Industrial Dynamics
    Edition3rd revision
    Number of pages24
    ISBN (Print)8778731127
    Publication statusPublished - 2001
    SeriesDRUID Working Paper
    Number01-13

    Cite this

    Foss, N. J. (2001). Bounded Rationality in the Economics of Organization: Present Use and (Some)Future Possibilities. (3rd revision ed.) DRUID - Danish Research Unit for Industrial Dynamics. DRUID Working Paper, No. 01-13