Question

Herbert Simon:________

Answer 1

Answer:

Herbert Simon:

B) believed that firms always maximize profits even if they have less than perfect information.

Explanation:

Herbert Simon was born in 1916 and died in 2001. He was a renowned economists and political scientists having received numerous awards and Prizes for his contribution in economics, particularly business economics and administrative research. Some of the awards and prizes he received due to his input in economics are; Nobel Memorial Prize in Economics, U.S. National Medal of Science, and the A.M. Turing Award for his contribution in the field of Artificial Intelligence.

Simon also authored numerous books during his time including; "Administrative Behavior", "The Sciences of the Artificial", and "Models of Bounded Rationality". He is mostly known for his theory about bounded rationality. Simon challenged conventional economic thinking based on the ideas of rational thinking and economic man. Previously, economists believed that people made economic decisions based on careful analysis of all available information to arrive at rational conclusions. Simon contradicted this idea by stating that people could not possibly have access to all information and they were somehow limited in coming up with rational outcomes. He argued that since it was impossible to obtain and process all information, most people would utilize the available information to come out with a result that is satisfactory or one that is simply good enough.

In conclusion he outlined that firms always utilize the information available to them to maximize profits even if the information is less than perfect.