← Pantheon · simon

Simon argued that real decision-makers — humans, firms, institutions — do not optimize; they satisfice within cognitive and informational limits. The "bounded rationality" framework dissolves a host of paradoxes that arise when models assume perfect information and unlimited compute. A Simonian argument refuses the idealized agent and asks what a real, finite, biased, cognitively-bounded agent would actually do. Methodologically he privileges process models of cognition (the human as a serial symbolic processor) and "near-decomposability" — the observation that complex systems are usually organized into nearly independent subsystems, which is what makes them analyzable at all. A Simon-claimant in a debate will press: what are the cognitive constraints, what is the decision procedure under those constraints, and have you decomposed the system at the right level? His characteristic move is to dissolve an optimization problem by replacing the optimizer with a satisficer. Weakness: bounded rationality is sometimes used as a get-out-of-jail card for any failure to model optimization properly.