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

Nicolai Foss ()

No 01-13, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

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.

Keywords: Varieties of bounded rationality; incomplete contracts; economic organization; cognitive psychology (search for similar items in EconPapers)
JEL-codes: B41 D23 L2 M1 (search for similar items in EconPapers)
Date: 2001
View list of references View citations in EconPapers

Downloads: (external link)
http://www3.druid.dk/wp/20010013.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:aal:abbswp:01-13

Access Statistics for this paper

More papers in DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies
Series data maintained by Keld Laursen ().