This paper uses four different disappointment models to examine the production decision of the competitive firm under uncertainty when the firm is not only risk-averse, but also disappointment-averse. We show the conditions under which the disappointment-averse firm will produce less than its...

This paper delves into the effects that strategic representations have on firm performance. It does so in four ways. First, it describes different types of representations—internal, external, and distributed—and it points to their pervasiveness in strategy. Second, it presents a framework to...

We investigate what it means for one act to be more ambiguous than another. The question is evidently analogous to asking what makes one prospect riskier than another, but beliefs are neither objective nor representable by a unique probability. Our starting point is an abstract class of...

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...

This paper analyzes a boundedly rational decision maker who is uncertain about his preference and faces the following trade-off: adding a good to the choice set has a positive option value but increases the complexity of the choice problem. The increased complexity is modeled as a reduction of...

Game spaces in which an organism must repeatedly compete with an opponent for mutually exclusive outcomes are critical methodologies for understanding decision-making under pressure. In the non-transitive game rock, paper, scissors (RPS), the only technique that guarantees the lack of...

The present study identifies a major limitation of current research on multinational corporations (MNCs). Joint decision making in a distributed setting is of critical importance in practice, but has received little attention in our theories. To address this gap in the knowledge, we examine the...

This paper identifies cognitive conditions under which a rational individual or group decision-maker will want to commit ex ante to some choice restrictions, in order to get extra information about an uncertain state of nature. We show that the implemented limitations will then bring her to...