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conditions of bounded rationality. [...] Two concepts are central to the
characterization: search and satisficing. (Simon, 1979, p. 502)
The concepts of search and satisficing are intimately related. I have pointed
above that it is the hypothesis of satisficing that allows for the relevance of search
processes within decision making process. On the other hand, a mechanism of
search — if it is not intended to be exhaustive, in which case it would be unneces‑
sary to model it — needs a stop criterion, and Simon postulates satisficing for that,
and points to empirical evidence sustaining that this is the criterion actually used
by people in a wide range of situations, especially the more complex ones. Satisfic‑
ing and search are, therefore, strongly complementary.
The second point in need of further comment is the one concerning computa‑
tion. It has already been suggested that an important source of inspiration to the
concept of satisficing, and to the use Simon does of search procedures in association
with it, were his initial incursions in cognitive science, especially his attempts to
program computers to imitate human decision making procedures and problem
solving activity. The analogy between the human mind and the computer, in gen‑
eral, is taken in quite a literal fashion. One aspect of the theory that underlines this
clearly is the practical identification between “computation” and “rational proce‑
dures” — people compute, computers think etc.
Economics, says Simon, “has to be concerned with computation”, with “the
processes people actually use to make decisions”. However, these processes are
precisely the object of another discipline: cognitive science. Economics is therefore,
in this sense, tributary to cognitive science. It seems to me clear enough that the
origin of Simon’s formulations about rationality is, from the mid‑fifties on, cogni‑
tive science. His intervention in economics is fully coherent with his work in that
area.
In defining procedural rationality, Simon (1976b) defines also another concept
as counterpoint, substantive rationality. Behavior is substantively rational when it
is adequate to the realization of given ends, subject to given conditions and con‑
straints. Behavior is procedurally rational when it is the outcome of appropriate
deliberation. Global rationality is understood as substantive in the sense that it is
only concerned with what is the choice done, with its result. The concept of pro‑
cedural rationality focuses on how the choice is done. The crucial issue in the dis‑
tinction between substantive and procedural rationality lies in the proposition that
the decision making process, and therefore, also the agent that carries out this
process, influences crucially the decision result. Simon’s research in the area of
cognitive science, demonstrated that, in complex situations, the choice taken, its
result, strongly depended on the particular process that generated it, and not only
on the objectives that oriented it. Hence, it becomes indispensable to know the
process by which the choice is taken. As we have seen, this is precisely what Simon
had been doing — more or less explicitly and consciously — since the 1950s.
We have also already noticed the close relation that exists between “decision
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procedures” and “computation”. What I expect to be clear at this point is that the
central question regarding procedural rationality is computational: procedures are
algorithms. Simon conceived satisficing and search processes as algorithms, since
they were forms of practical implementation (programming) of decision procedures
in the computer. Moreover, it is worth emphasizing that these concepts, at least in
their publication, historically preceded the term “bounded rationality”. The idea
of choice of satisfactory alternatives emerges in Simon (1955), the term “satisfic‑
ing” associated with search for alternatives appears fully developed in Simon
(1956), the term “bounded rationality” is the first general concept that tries to
encompass those simplifications/procedures and appears in Simon (1957). The sec‑
ond general concept, which came later, and that attempts to embrace the very same
mechanisms is “procedural rationality”, which appears in Simon (1976b).
10
In his
autobiography, Simon (1996) comments the 1955 paper — “mostly written in 1952
during my first RAND summer” — in the following way:
What made the paper distinct from most contemporary economic
writing was it explicit concern for the process of making decisions, for
procedural and not just substantive rationality. Because of this concern
with process, the paper also represents a first step toward computer sim‑
ulation of human behavior. (Simon, 1996, pp. 165‑6)
11
Summing up, the way by which Simon models rational behavior is, since very
early, founded on procedures, the basis of which is composed by satisficing and by
search processes. In this sense, and although it is an a posteriori imputation, the
concept of procedural rationality is the one that best captures Simon’s view about
rationality, as positively defined. The concept of bounded rationality, in its turn,
tends always to operate by negation: the negation of global rationality. This argu‑
ment could be questioned by saying that the problem is, at the bottom, just termi‑
nological, and that the concepts of bounded rationality and procedural rationality
are really no more than two ways to look at the same thing, tow points of view
about the same set of theoretical principles. I would not oppose to it as a first ap‑
proximation. However, to stop there implies, in my opinion, to loose something of
what Simon has to tell us about rationality, and also to attribute to him more than
what he has really done. A clear expression of the distinction I am delineating ap‑
pears in the differences in reception of Simon’s rationality concepts: the repercus‑
sion of bounded rationality in economic science is much superior to the one of its
younger and hard working sister.
10
This is, as far as I know of, the
first appearance of the term in Simon’s work.
11
The fact that this comment is done, evidently, in hindsight, does not affect the argument here pro‑
posed, once it is also, and explicitly, an imputation.