Herbert Simon | Kaelan

Herbert Simon (1916–2001) won the Nobel Prize in Economics for a simple observation: humans don’t optimize, they satisfice. We don’t find the best option; we find one that’s good enough and stop searching.

This wasn’t a flaw to correct but a necessary adaptation. Bounded rationality recognizes that decision-makers have limited information, limited computation, and limited time. The perfectly rational agent of economic theory is a fiction; real agents use heuristics, rules of thumb, and shortcuts.

Simon’s work spanned economics, psychology, artificial intelligence, and organizational theory. His operational definitions (terms that cash out in procedures and constraints) model the engineer’s virtue: make assumptions realistic enough to run.