Although expected utility (EU) theory is a powerful tool for the analysis of decision under risk, it has long been known that individual behavior, in both experimental and market settings, deviates from the predictions of simple EU models. These violations of EU predictions were largely...

This paper provides an overview of the work of Herbert Simon and his ideas about rational decision making. By his own standards, Simon is an economist who works in the tradition of Adam Smith and Alfred Marshall. The central theme in Simon’s research is how human beings organize themselves in...