Herbert Alexander Simon

Herbert Alexander Simon
(1916)

American social scientist known for his contributions in a large number of fields including psychology, mathematics, statistics, and operations research, all of which he synthesized in a key theory which led to his winning the 1978 Nobel Prize for Economics.
Simon graduated from the University of Chicago in 1936, obtaining his Ph.D. in 1943. After holding various posts in political science he became, in 1949, professor of administration and psychology at Carnegie-Mellon University, Pittsburgh, later becoming professor of computer science and psychology there.

He is best known for his work on the theory of corporate decision-making known as "behaviourism." In his influential book Administrative Behavior (1947), Simon sought to replace the highly simplified classical approach to economic modeling and its concept of the single decision-making, profit-maximizing entrepreneur with an approach to decision-making that recognizes a multiplicity of factors. According to Simon, this framework provides a more satisfactory theoretical approach for a world in which decision-making units are large enough for each one to have significant effects on prices and outputs. Crucial to this theory is the concept of satisfying behaviour--the achievement of acceptable levels of economic variables while keeping complications and risks at a minimum--as contrasted with the traditional emphasis on the achievement of maximum profits as the primary motivating factor. Simon's theory thus attempts to consider the psychological factors involved in decision-making that classical economists tend not to take into account. Later in his career, Simon became increasingly involved in the attempt to create artificial intelligence by computer technology. He is the author of several books on computers, economics, and management.