Editing Herbert A. Simon (section)

===Sociology and economics===
Simon has been credited for revolutionary changes in [[microeconomics]]. He is responsible for the concept of organizational decision-making as it is known today. He was the first to rigorously examine how administrators made decisions when they did not have [[Perfect information|perfect and complete information]]. It was in this area that he was awarded the Nobel Prize in 1978.<ref>{{cite web|title=Press Release: Studies of Decision-Making Lead to Prize in Economics |url= https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1978/press.html|publisher=Nobelprize.org|access-date=May 11, 2014|date=October 16, 1978}}</ref>

At the [[Cowles Commission]], Simon's main goal was to link economic theory to mathematics and statistics. His main contributions were to the fields of [[general equilibrium]] and [[econometrics]]. He was greatly influenced by the marginalist debate that began in the 1930s. The popular work of the time argued that it was not apparent empirically that entrepreneurs needed to follow the marginalist principles of profit-maximization/cost-minimization in running organizations. The argument went on to note that profit maximization was not accomplished, in part, because of the lack of complete information. In decision-making, Simon believed that agents face uncertainty about the future and costs in acquiring information in the present. These factors limit the extent to which agents may make a fully rational decision, thus they possess only "[[bounded rationality]]" and must make decisions by "[[satisficing]]", or choosing that which might not be optimal, but which will make them happy enough. Bounded rationality is a central theme in [[behavioral economics]]. It is concerned with the ways in which the process of decision-making influences the decision itself. The term is used to designate rational choices that take into account the cognitive limitations of both knowledge and cognitive capacity.

Further, Simon emphasized that psychologists invoke a "procedural" definition of rationality, whereas economists employ a "substantive" definition. Gustavos Barros argued that the procedural rationality concept does not have a significant presence in the economics field and has never had nearly as much weight as the concept of bounded rationality.<ref>{{cite journal|last1=Barros|first1=Gustavo|title=Herbert A. Simon and the Concept of Rationality: Boundaries and Procedures|journal=Brazilian Journal of Political Economy|date=2010|volume=30|issue=3|pages=455–472|url=http://www.scielo.br/pdf/rep/v30n3/a06v30n3.pdf|doi=10.1590/S0101-31572010000300006|s2cid=8481653|doi-access=free}}</ref> However, in an earlier article, Bhargava (1997) noted the importance of Simon's arguments and emphasized that there are several applications of the "procedural" definition of rationality in econometric analyses of data on health. In particular, economists should employ "auxiliary assumptions" that reflect the knowledge in the relevant biomedical fields, and guide the specification of econometric models for health outcomes.

Simon was also known for his research on [[industrial organization]].<ref>{{Cite journal|last1=Anderson|first1=Marc H.|last2=Lemken|first2=Russell K.|date=2019|title=An Empirical Assessment of the Influence of March and Simon's Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece|journal=Journal of Management Studies|language=en|volume=56|issue=8|pages=1537–1569|doi=10.1111/joms.12527|s2cid=201323442|issn=1467-6486}}</ref> He determined that the internal organization of firms and the external business decisions thereof, did not conform to the [[Neoclassical economics|neoclassical theories]] of "rational" decision-making.{{citation needed|date=April 2024}} Simon wrote many articles on the topic over the course of his life, mainly focusing on the issue of decision-making within the behavior of [[bounded rationality]]". "Rational behavior, in economics, means that individuals maximize their utility function under the constraints they face (e.g., their budget constraint, limited choices, ...) in pursuit of their self-interest. This is reflected in the theory of [[subjective expected utility]]. Theories of bounded rationality relax one or more assumptions of standard expected utility theory".<ref name="Simon 1990 pp. 15–18">{{cite book | editor-last1 =Eatwell
 |editor-first1        =John
 |editor-link1         =John Eatwell, Baron Eatwell
 |editor-last2         =Milgate
 |editor-first2        =Murray 
 |editor-link2         =Murray Milgate
 |editor-last3         =Newman
 |editor-first3        =Peter 
 |editor-link3         =Peter Kenneth Newman
 |last=Simon | first=Herbert A. | title=Utility and Probability | chapter=Bounded Rationality | publisher=Palgrave Macmillan UK | publication-place=London | date=1990 | isbn=978-0-333-49541-4 | doi=10.1007/978-1-349-20568-4_5 | pages=15–18}}</ref>

Simon determined that the best way to study these areas was through [[computer simulation]]s. As such, he developed an interest in [[computer science]]. Simon's main interests in computer science were in artificial intelligence, [[human–computer interaction]], principles of the organization of humans and machines as information processing systems, the use of computers to study (by modeling) philosophical problems of the nature of intelligence and of [[epistemology]], and the social implications of computer technology.<ref name=":0">{{Cite web |title=Computer Pioneers - Herbert A. Simon |url=https://history.computer.org/pioneers/simon.html |access-date=November 10, 2022 |website=history.computer.org}}</ref>

In his youth, Simon took an interest in [[land economics]] and [[Georgism]], an idea known at the time as "single tax".<ref name="Velupillai, Kumaraswamy 2000"/> The system is meant to redistribute unearned [[economic rent]] to the public and improve land use. In 1979, Simon still maintained these ideas and argued that [[land value tax]] should replace taxes on wages.<ref>Simon, Herbert. [http://www.cooperative-individualism.org/batt-h-william_real-explanation-for-the-tax-rebellion-2011.pdf "Letter to the Pittsburgh City Council"], December 13, 1979. Archived in the Herbert A. Simon Collected Papers, Carnegie Mellon University Library. Quote: "It is clearly preferable to impose the additional cost on land by increasing the land tax, rather than to increase the wage tax"</ref>

Some of Simon's economic research was directed toward understanding technological change in general and the information processing revolution in particular.<ref name=":0" />