“Global rationality, the rationality of neoclassical theory, assumes that the decision maker has a comprehensive, consistent utility function, knows all the alternatives that are available for choice, can compute the expected value of utility associated with each alternative, and chooses the alternative that maximizes expected utility. Bounded rationality, a rationality that is consistent with our knowledge of actual human choice behavior, assumes that the decision maker must search for alternatives, has egregiously incomplete and inaccurate knowledge about the consequences of actions, and chooses actions that are expected to be satisfactory”

— Herbert A. Simon

attain targets while satisfying constraints
Simon (1997, p. 17); As cited in: Gustavo Barros (2010, p. 460).
1980s and later

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Herbert A. Simon58

American political scientist, economist, sociologist, and p… 1916–2001

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“If we accept values as given and consistent, if we postulate an objective description of the world as it really is, and if we assume that the decision maker's computational powers are unlimited, then two important consequences follow. First, we do not need to distinguish between the real world and the decision maker's perception of it: he or she perceives the world as it really is. Second, we can predict the choices that will be made by a rational decision maker entirely from our knowledge of the real world and without a knowledge of the decision maker's perceptions or modes of calculation. (We do, of course, have to know his or her utility function.)
If, on the other hand, we accept the proposition that both the knowledge and the computational power of the decision maker are severely limited, then we must distinguish between the real world and the actor's perception of it and reasoning about it. That is to say, we must construct a theory (and test it empirically) of the processes of decision. Our theory must include not only the reasoning processes but also the processes that generate the actor's subjective representation of the decision problem, his or her frame.”

Herbert A. Simon (1916–2001) American political scientist, economist, sociologist, and psychologist

H.A. Simon (1986), " Rationality in psychology and economics http://www.kgt.bme.hu/targyak/msc/ng/BMEGT30MN40/data/JoBus-86-rationality-HSimon.pdf," Journal of Business, p. 210-11” <br class="br">1980s and later

“Rationality requires a choice among all possible alternative behaviors. In actual behavior, only a very few of all these possible alternatives come to mind.”

Herbert A. Simon book Administrative Behavior

Source: 1940s-1950s, Administrative Behavior, 1947, p. 79; As cited in: Terry Winograd, ‎Fernando Flores (1986) Understanding Computers and Cognition: A New Foundation for Design. p. 21.

“As conceived in this book, economics is the science of rational choice in a world─our world─in which resources are limited in relation to human wants. The task of economics, so defined, is to explore the implications of assuming that man is a rational maximizer of his ends in life, his satisfactions─what we shall call his “self-interest.” Rational maximization should not be confused with conscious calculation. Economics is not a thoery about consciousness. Behavior is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.(…) Nor is perfect rationality assumed; rational-choice thoery allows us to assume that rationality is “bounded” because of human cognitive limitations, although another way to think of those limitations is as costs of absorbing and using information.”

Richard A. Posner (1939) United States federal judge

Source: Economic Analysis of Law (7th ed., 2007), Ch. 1: The Nature of Economic Reasoning

“In Administrative Behavior, bounded rationality is largely characterized as a residual category — rationality is bounded when it falls short of omniscience. And the failures of omniscience are largely failures of knowing all the alternatives, uncertainty about relevant exogenous events, and inability to calculate consequences. There was needed a more positive and formal characterization of the mechanisms of choice under conditions of bounded rationality… Two concepts are central to the characterization: search and satisficing.”

Herbert A. Simon (1916–2001) American political scientist, economist, sociologist, and psychologist

Source: 1960s-1970s, "Rational decision making in business organizations", Nobel Memorial Lecture 1978, p. 502; As cited in Barros (2010, p. 464-5).

“Throughout the social sciences today, the dominant form of modeling is based upon the rational-choice paradigm. Game theory, in particular, is typically based upon the assumption of rational choice. In my view, the reason for the dominance of the rational-choice approach is not that scholars think it is realistic. Nor is game theory used solely because it offers good advice to a decision maker, because its unrealistic assumptions undermine much of its value as a basis for advice.”

Robert Axelrod book The Complexity of Cooperation

Introduction
The Complexity of Cooperation (1997)

“It is impossible for the behavior of a single, isolated individual to reach a high degree of rationality. The number of alternatives he must explore is so great, the information he would need to evaluate them so vast that even an approximation to objective rationality is hard to conceive. Individual choice takes place in rationality is hard to conceive… Actual behavior falls short in at least three ways, of objective rationality:”

Herbert A. Simon book Administrative Behavior

1940s-1950s, Administrative Behavior, 1947

“If there were no limits to human rationality administrative theory would be barren. It would consist of the single precept: Always select that alternative, among those available, which will lead to the most complete achievement of your goals.”

Herbert A. Simon (1916–2001) American political scientist, economist, sociologist, and psychologist

Simon (1945, p. 240); As cited in:
1940s-1950s

“Roughly speaking, rationality is concerned with the selection of preferred behavior alternatives in terms of some system of values, whereby the consequences of behavior can be evaluated.”

Herbert A. Simon book Administrative Behavior

Source: 1940s-1950s, Administrative Behavior, 1947, p. 84.

“There is much evidence that people are not rational, in the economist’s sense; nor do they take into account expectation, in the precise interpretation of that word. As a result economic theory often does not correspond with what happens in the market. Some would argue that we need descriptive economics. I would argue that all should be taught about probability, utility, and MEU (maximization of expected utility) and act accordingly.”

Dennis Lindley (1923–2013) British statistician

2. Stylistic Questions. p. 22.
Understanding Uncertainty (2006)

“Modem mainstream economic theory bravely assumes that people make their decisions in such a way as to maximize their utility. Accepting this assumption enables economics to predict a great deal of behavior (correctly or incorrectly) without ever making empirical studies of human actors.”

Herbert A. Simon (1916–2001) American political scientist, economist, sociologist, and psychologist

Simon (1990) "Invariants of Human Behavior" in: Annu. Rev. Psychol. 41: p. 6.
1980s and later

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