Brazilian Journal of Political Economy, vol 37, nº 4 (149), pp 719-733, October-December/2017 Empiricism in Herbert Simon: Administrative Behavior within the evolution of the Models of Bounded and Procedural Rationality Empirismo em Herbert Simon: Comportamento Administrativo dentro da evolução dos Modelos de Racionalidade Limitada e Procedural ALEJANDRO HORTAL* RESUMO: Este artigo contextualiza o livro de Simon, Comportamento Administrativo, na evolução de suas ideias argumentando que o elemento comum que une este livro com o restante do trabalho de Simon não é a crítica da abordagem clássica, mas uma estrutura epistemológica, com base em uma metodologia empírica. Este empirismo é o elemento que permaneceu constante durante sua carreira e levou-o a introduzir fatores psicológicos ao explicar o comportamento dos agentes econômicos sob seus modelos de racionalidade limi- tada e processual. Palavras-Chave: Herbert A. Simon; racionalidade limitada; racionalidade processual; empirismo. abstract: This paper contextualizes Simon’s book, Administrative Behavior, within the evolution of his ideas arguing, contrary to what some have posited, that the common ele- ment that unites this book with the rest of Simon’s work is not the criticism of the classical approach, but an epistemological frame, based on an empirical methodology. This empiri- cism is the element that remained constant during his career and led him to introduce psy- chological factors when explaining the behavior of economic agents under his models of bounded and procedural rationality. KEYWORDS: Herbert A. Simon; bounded rationality; procedural rationality; empiricism. JEL Classification: A11; D01; B52; B31; D21. * Department of Languages, Literatures and Cultures, University of North Carolina at Greensboro and Departmento de Lógica, Historia y Filosofía de la Ciencia, Universidad Nacional de Educación a Distancia (UNED). E-mail: [email protected]. Submitted: 17/September/2015; Approved: 15/ August/2016. http://dx.doi.org/10.1590/0101-31572017v37n04a04 Revista de Economia Política 37 (4), 2017 • 719 Introduction In light of the importance that Herbert Simon and his concept of bounded rationality (BR) have been acquiring among behavioral economists in general (Gei- ger, 2015, p. 2) and, as an example, in regard to nudge theory (Muramatsu and Fonseca, 2012) and other branches of behavioral economics in particular, this paper aims at contextualizing the role of Herbert Simon’s book Administrative Behavior (AB), within the framework of the evolution of his ideas. Some authors see in this first work a strong criticism of classical and neoclassical elements. A different position is argued here. Simon’s first book, far from being extremely crit- ical and opposed to mainstream economics, did share some of its fundamental ideas. The common element that unites AB with the rest of Simon’s work is not the criti- cism of the classical approach, but an epistemological frame, based on empirical methodology, which contributed in the introduction to psychological factors in the explanation of economic agents. Some authors, like Gustavo Barros, mentioned this disparity (2010, p. 457). This paper adds to that extent that what was constant during his research career and what pushed Simon to a complete rejection of the classical paradigm years later was this philosophical empiricism. This empirical approach, among other factors, was the main foundation of his models of bound- ed and procedural rationality. Simon’s constant use of a positivist approach, not only made him the epicenter of this epistemological viewpoint in public policy (Cruise, 1997), but also helped him to develop other concepts (satisficing, etc.) that eventually introduced a new paradigm in rational theory within the larger context of a behavioral revolution (Mingus, 2007; Geiger, 2015). This new paradigm was yet to be seen in Simon’s first book. In the history of social sciences, economics and management some authors (Dequech, 2001; González, 2004; Brown, 2004; Sent, 2005; Callebaut, 2007, p. 77) have written about the importance of Herbert Simon in criticizing the standard (classical and neoclassical) economic model, even considering him a point of inflex- ion in how the theory has changed when describing and explaining economic deci- sions. Many of them pay little or no attention to the evolution of this criticism. Other authors (Barros, 2010) have argued that the first writings of Simon are in line with the neoclassical tradition in economy, as opposed to those written later, which are centered on the idea that neoclassic postulates are unrealistic. The objec- tive of this article is to contextualize AB within the epistemological evolution of his research, analyzing some of the elements of his criticism of mainstream econom- ics that were present then, while shedding light on other elements that were absent. This will clarify the role of his first book within the general scope of his empirical philosophy, the true and constant foundation of his theoretical building that gave birth to the models of bounded and procedural rationality, fundamental premise of behavioral economics. This concept, which appeared for the first time in his book Models of Man (Simon, 1957) and its parallel concept of “procedural rationality” (Simon, 1976) were coined by Simon to criticize the theory of rationality of neoclassical econom- 720 Brazilian Journal of Political Economy 37 (4), 2017 • pp. 719-733 ics, accusing it of being an ideal generalization of how agents really behave. During Simon’s extensive research career, these concepts appear and reappear with the same intention and powerful criticism. Considering that Simon’s doctoral thesis was published as a book (Simon, 1997 [1947]), the question this article answers is if, in that first book, we can implicitly see the above mentioned model, as Simon himself posits (Simon, 1991, p. 87), or if it would be an anachronism to see such work as the birth of it (Barros, 2010, p. 459). EMPIRICISM IN Herbert SIMON Although there are elements in AB that depart from the neoclassical tradition, there are also ideas in line with it. The important element that was constant during his career was the empirical frame of his research, that is, his “world view,” bor- rowing Reva Brown’s terminology (2004, p. 1246). What we do not find in his first writings is a deep opposition to classical economics. Simon’s logical evolution goes from the introduction of empirical methodologies that helped giving birth to his theory of rationality and its limits, to a new alternative model of rationality. In his first book, he challenged parts of mainstream economics, but kept and used some of its central terminology, e.g., “maximization” or the “criterion of efficiency” and premises. It would be in subsequent articles (Simon, 1955, 1956) that he later in- troduced new concepts and models (satisficing, and administrative man) replacing those belonging to the neoclassical paradigm. Simon himself (1991, p. 53) and others (Crowther-Heyck, 2005, p. 70; González, 2004, p. 12) noted that one of the most important influences he had as a student at the University of Chicago was the logical positivism of his professor Rudolph Carnap. Such influence can be seen in his doctoral thesis, which started as an attempt to study the logical fundaments of administrative science. The origi- nal title of Simon’s thesis was The Logical Structure of an Administrative Science. Carnap’s positivism had a long lasting effect in Simon: “I had already embraced a logical positivism that I have never relinquished (I would prefer to call it empiri- cism now)” (Simon, 1991, p. 44). As Crowther-Heyck explains: This philosophy was based on the radical empiricism of Ernst March and the formal-logical understanding of mathematics developed by Got- tlop Frege, Bertrand Russell, and Alfred North Whitehead. The logical empiricists held that the only things we could know for certain about the world were our sensory experiences of it. (2005, p. 71) His philosophical empiricism was already present at the end of the 1930s, when he and other friends interested in epistemology met regularly to discuss different interests and projects always under the umbrella of logical positivism (Simon, 1991, p. 75). Simon explains in AB that “scientific propositions […] are statements about Revista de Economia Política 37 (4), 2017 • pp. 719-733 721 the observable world and the way in which it operates” (1997 [1947], p. 356); these statements can be classified as “true” or “false,” as opposed to ethical statements based on preferences. Observation, therefore, had to be the epistemological epicen- ter of any research, not only about the physical world, but also about our behavior. Simon’s empiricism was never as radical as the one practiced by the above-men- tioned philosophers, but he understood the need to integrate the mathematical formalization and empirical testing. Experimentation was also central for his research, and together with mathe- matical models, social sciences were not in a position to ignore the actual behav- ioral processes anymore, for if they wanted to have any scientific status, Simon’s epistemology demanded a realistic explanation of human behavior and its pro- cesses. This empiricism is one of the reasons why Simon started to analyze behavior as a psychologist: not only looking at the outcomes of decisions, but also the pro- cess itself. As Bryan Jones explains, “Simon also developed what he termed a pro- cedural model of rationality, based on the