By Herbert A. Simon
The Quarterly Journal of Economics, Vol. 69, No. 1.

This article by Herbert Simon provided one of the leading alternatives to the traditional model of rational profit-maximizing behavior, bringing to the forefront of academic attention several of the key issues on which behavioral economics would eventually focus.

The ideas embodied in this paper were initially developed in a series of discussions with Herbert Bohnert, Norman Dalkey, Gerald Thompson, and Robert Wolfson during the summer of 1952. These collaborators deserve a large share of the credit for whatever merit this approach to rational choice may possess. A first draft of this paper was prepared in my capacity as a consultant to the RAND Corporation. It has been developed further (including the Appendix) in work with the Cowles Commission for Research in Economics on “Decision Making Under Uncertainty,” under contract with the Office of Naval Research, and has been completed with the aid of a grant from the Ford Foundation.