|Herbert Alexander Simon
(June 15, 1916 – February 9, 2001) was an American political scientist
whose research ranged across the fields of cognitive psychology,
computer science, public administration, economics, management,
philosophy of science and sociology and was a professor, most notably,
at Carnegie Mellon University. With almost a thousand, often very
highly cited, publications he is one of the most influential social
scientists of the 20th century.
Simon was not only a polymath, but a truly innovative thinker. He was
among the founding fathers of several of today's most important
scientific domains, including artificial Intelligence, information
processing, decision-making, problem-solving, attention economics,
organization theory, complex systems, and computer simulation of
scientific discovery. He coined the terms bounded rationality and
satisficing, and was the first to analyze the architecture of
complexity and to propose a preferential attachment mechanism to
explain power law distributions.
Simon's genius and influence is evidenced by the many top-level honors
he received later in life. These include: the ACM's Turing Award for
making "basic contributions to artificial intelligence, the psychology
of human cognition, and list processing" (1975); the Nobel Memorial
Prize in Economics "for his pioneering research into the
decision-making process within economic organizations" (1978); the
National Medal of Science (1986); and the APA's Award for Outstanding
Lifetime Contributions to Psychology (1993).
Herbert Alexander Simon
was born into a Jewish family in Milwaukee, Wisconsin on June 15,
1916. His father was an electrical engineer who had come to the United
States from Germany in 1903 after earning his engineering degrees from
Prague and Cologne. His European ancestors had been piano makers,
goldsmiths, and vintners.
Herbert Simon was educated as a child in the public school system in
Milwaukee where he developed an interest in science. He found
schoolwork to be interesting but rather easy. Unlike many children,
Simon was exposed to the idea that human behavior could be studied
scientifically at a relatively young age due to the influence of his
mother’s younger brother, Harold Merkel, who had studied economics at
the University of Wisconsin-Madison under John R. Commons. Through his
uncle’s books on economics and psychology, Simon discovered the social
sciences. Simon received both his B.A. (1936) and his Ph.D. (1943) in
political science, from the University of Chicago, where he studied
under Harold Lasswell and Charles Edward Merriam.
Among his earliest influences, Simon has cited Richard Ely’s economics
textbook, Norman Angell’s The Great Illusion, and Henry George’s
Progress and Poverty. In 1933, Simon entered the University of
Chicago, and following those early influences, he studied the social
sciences and mathematics. His most important mentor at the University
was Henry Schultz who was an econometrician and mathematical
economist. Eventually his studies led him to the field of
organizational decision making which would become the subject of his
From 1939 to 1942, Simon acted as director of a research group at the
University of California, Berkeley. When the group’s grant was
exhausted, he took a position in political science at the Illinois
Institute of Technology. Back in Chicago, he began participating in
the seminars held by the staff of the Cowles Commission who at that
time included Trygve Haavelmo, Jacob Marschak, and Tjalling Koopmans.
He thus began a more in-depth study of economics in the area of
institutionalism. Marschak brought Simon in to assist in the study he
was currently undertaking with Sam Schurr of the “prospective economic
effects of atomic energy”.
From 1950 to 1955, Simon studied mathematical economics and during
this time, together with David Hawkins, discovered and proved the
Hawkins-Simon theorem on the “conditions for the existence of positive
solution vectors for input-output matrices." He also developed
theorems on near-decomposability and aggregation. Having begun to
apply these theorems to organizations, Simon determined around 1954
that the best way to study problem-solving was to simulate it with
computer programs, which led to his interest in computer simulation of
Simon had a keen interest in the arts. He was a friend of Robert
Lepper  and Richard Rappaport and he influenced Lepper's interest
in the impact of machine on society . Rappaport also painted
Simon's commissioned portrait at Carnegie Mellon University.
Simon was a pioneer in the field of
artificial intelligence, creating with Allen Newell the Logic Theory
Machine (1956) and the General Problem Solver (GPS) (1957) programs.
GPS was possibly the first method of separating problem solving
strategy from information about particular problems. Both programs
were developed using the Information Processing Language (IPL) (1956)
developed by Newell, Cliff Shaw and Simon. Donald Knuth mentions the
development of list processing in IPL with the linked list originally
called "NSS memory" for its inventors.
In the early 1960s Simon wrote a paper responding to a claim by the
psychologist Ulric Neisser that machines might be able to replicate
'cold cognition', e.g. processes like reasoning, planning, perceiving,
and deciding, but could not replicate 'hot cognition', including
desiring, feeling pain or pleasure, and having emotions. Simon's paper
was eventually published in 1967. It was ignored by the AI research
community for some years, but later became very influential e.g.
indirectly through the work of Sloman and Picard on emotions.
Simon also collaborated with James G. March on several works in
With Allen Newell, Simon developed a theory for the simulation of
human problem solving behavior using production rules. The study of
human problem solving required new kinds of human measurements and,
with Anders Ericsson, Simon developed the experimental technique of
verbal protocol analysis. Simon was interested in the role of
knowledge in expertise. He said that to become an expert required
about 10 years of experience and he and colleagues estimated that
expertise was the result of learning roughly 50,000 chunks of
information. A chess expert was said to have learned about 50,000
chunks or chess position patterns.
Simon was also interested in how humans learn and, with Edward
Feigenbaum, he developed the EPAM (Elementary Perceiver and Memorizer)
theory, one of the first theories of learning to be implemented as a
computer program. EPAM was able to explain a large number of phenomena
in the field of verbal learning. Later versions of the model were
applied to concept formation and the acquisition of expertise.
He was awarded the ACM's A.M. Turing Award along with Allen Newell in
1975. "In joint scientific efforts extending over twenty years,
initially in collaboration with J. C. (Cliff) Shaw at the RAND
Corporation, and subsequentially with numerous faculty and student
colleagues at Carnegie Mellon University, they have made basic
contributions to artificial intelligence, the psychology of human
cognition, and list processing."
While living in Pittsburgh, PA, he advised the citizenry on various
issues including the use of public funds to build stadiums and the
method of raising tax revenue. Simon emphasized the usefulness of the
land tax, reflecting the early influence of Henry George on his
Contributions to economics
Herbert 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
also the first to discuss this concept in terms of uncertainty; i.e.
it is impossible to have perfect and complete information at any given
time to make a decision. While this notion was not entirely new, Simon
is best known for its origination. It was in this area that he was
awarded the Nobel Prize in 1978.
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 empirically apparent
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 can 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.
Simon was known for his research on industrial organization. He
determined that the internal organization of firms and the external
business decisions thereof did not conform to the Neoclassical
theories of “rational” decision-making. 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 what he termed “bounded
rationality.” “Rational behavior, in economics, means that individuals
maximizes his 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. The term bounded rationality is used to designate rational
choice that takes into account the cognitive limitations of both
knowledge and cognitive capacity. Bounded rationality is a central
theme in behavioral economics. It is concerned with the ways in which
the actual decision-making process influences decisions. Theories of
bounded rationality relax one or more assumptions of standard expected
Simon determined that the best way to study these areas was through
computer simulation modeling. As such, he developed an interest in
computer science. Herbert 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. Some
of Simon's economic research was directed toward understanding
technological change in general and the information processing
revolution in particular.
Contribution to Library Science
Satisficing, as defined by Simon, can
be applied to library and information science where researchers assess
how much information is adequate to meet their information need. With
the huge volume of information today, library researchers are forced
to use Simon's model of satisficing when searching. The first
satisfactory alternative is chosen over the best. Applying satisficing
to research is a way for researchers to adjust to the vast amount of
information today. (Buczynski, 2005)
Administrative Behavior was
Herbert Simon’s doctoral dissertation and his first book. It served as
the foundation for his life's work. The centerpiece of this book is
the behavioral and cognitive processes of making rational human
choices, that is, decisions. An operational administrative decision
should be correct and efficient, and it must be practical to implement
with a set of coordinated means.
Any decision involves a choice selected from a number of alternatives,
directed toward an organizational goal or subgoal. Realistic options
will have real consequences consisting of personnel actions or
non-actions modified by environmental facts and values. In actual
practice, some of the alternatives may be conscious or unconscious;
some of the consequences may be unintended as well as intended; and
some of the means and ends may be imperfectly differentiated,
incompletely related, or poorly detailed.
The task of rational decision making is to select the alternative that
results in the more preferred set of all the possible consequences.
This task can be divided into three required steps: (1) the
identification and listing of all the alternatives; (2) the
determination of all the consequences resulting from each of the
alternatives; and (3) the comparison of the accuracy and efficiency of
each of these sets of consequences. Any given individual or
organization attempting to implement this model in a real situation
would be unable to comply with the three requirements. It is highly
improbable that one could know all the alternatives, or all the
consequences that follow each alternative.
The question here is: given the inevitable limits on rational decision
making, what other techniques or behavioral processes can a person or
organization bring to bear to achieve approximately the best result?
Simon writes:“The human being striving for rationality and restricted
within the limits of his knowledge has developed some working
procedures that partially overcome these difficulties. These
procedures consist in assuming that he can isolate from the rest of
the world a closed system containing a limited number of variables and
a limited range of consequences.”
Administrative Behavior, as a text, addresses a wide range of human
behaviors, cognitive abilities, management techniques, personnel
policies, training goals and procedures, specialized roles, criteria
for evaluation of accuracy and efficiency, and all of the
ramifications of communication processes. Simon is particularly
interested in how these factors directly and indirectly influence the
making of decisions.
Weaving in and out of the practical functioning of all of these
organizational factors are two universal elements of human social
behavior that Simon addresses in Chapter VII—The Role of
Authority, and in Chapter X—Loyalties, and Organizational
Authority is a well studied, primary mark of organizational behavior,
and is straightforwardly defined in the organizational context as the
ability and right of an individual of higher rank to determine the
decision of an individual of lower rank. The actions, attitudes, and
relationships of the dominant and subordinate individuals constitute
components of role behavior that can vary widely in form, style, and
content, but do not vary in the expectation of obedience by the one of
superior status, and willingness to obey from the subordinate.
Authority is highly influential on the formal structure of the
organization, including patterns of communication, sanctions, and
rewards, as well as on the establishment of goals, objectives, and
values of the organization.
Decisions can be complex admixtures of facts and values. Information
about facts, especially empirically proven facts or facts derived from
specialized experience, are more easily transmitted in the exercise of
authority than are the expressions of values. Simon is primarily
interested in seeking identification of the individual employee with
the organizational goals and values. Following Lasswell he states
that “a person identifies himself with a group when, in making a
decision, he evaluates the several alternatives of choice in terms of
their consequences for the specified group”. A person may identify
himself with any number of social, geographic, economic, racial,
religious, familial, educational, gender, political, and sports
groups. Indeed, the number and variety are unlimited. The fundamental
problem for organizations is to recognize that personal and group
identifications can either facilitate or obstruct correct decision
making for the organization. A specific organization has to
deliberately determine and specify in appropriate detail and clear
language its own goals, objectives, means, ends, and values.
Chester Barnard pointed out that “the decisions that an individual
makes as a member of an organization are quite distinct from his
personal decisions”. Personal choices may determine whether an
individual joins a particular organization, and continue to be made in
his or her extra–organizational private life. But, as a member of an
organization, that individual makes decisions not in relationship to
personal needs and results, but in an impersonal sense as part of the
organizational intent, purpose, and effect. Organizational
inducements, rewards, and sanctions are all designed to form,
strengthen, and maintain this identification.
The correctness of decisions is measured by two major criteria: (1)
adequacy of achieving the desired objective; and (2) the efficiency
with which the result was obtained. Many members of the organization
may focus on adequacy, but the overall administrative management must
pay particular attention to the efficiency with which the desired
result was obtained.
Simon's contributions to research in the area of decision-making have
become increasingly mainstream in the business community thanks to the
growth of management consulting. Simon's decision-making steps of
Intelligence, Design, Choice, and Review are the basis of the work of
Most producers are employees, not
owners of the firms..... Viewed from the vantage point of classical
[economic] theory, they have no reason to maximize the profits of the
firms, except to the extent that they can be controlled by owners....
Moreover, there is no difference, in this respect, among profit-making
firms, non-profit organizations, and bureaucratic organizations. All
have exactly the same problem of inducing their employees to work
toward the organizational goals. There is no reason, a priori, why it
should be easier (or harder) to produce this motivation in
organizations aimed at maximizing profits than in organizations with
different goals. The conclusion that organizations motivated by
profits will be more efficient than other organizations does not
follow the organizational economy from the neo-classical assumptions.
If it is empirically true, other axioms will have to be introduced to
account for it.
What information consumes is rather obvious: it consumes the attention
of its recipients. Hence a wealth of information creates a poverty of
attention, and a need to allocate that attention efficiently among the
overabundance of information sources that might consume it.
Over Christmas, Allen Newell and I
created a thinking machine.
It is not my aim to surprise or shock
you – but the simplest way I can summarise is to say that there are
now in the world machines that think, that learn and that create.
Moreover, their ability to do these things is going to increase
rapidly until – in a visible future – the range of problems they can
handle will be coextensive with the range to which the human mind has