Herbert Simon

On 25 December 1937, Simon married Dorothea Isabel Pye. The marriage lasted until his death in 2001. In their long married life, lasting 63 years, they shared a wide range of interests and had co-published several papers in public administration and cognitive psychology. They had three children; Katherine, Peter, Barbara.

Simon was diagnosed with a cancerous tumor in his abdomen. In January 2001, he underwent surgery to remove the tumor at UPMC Presbyterian. Although the surgery was successful it gave rise to some complications and he died on February 9, 2001.

Today he is remembered as one of the founding fathers of many scientific domains such as decision-making, problem-solving, artificial intelligence and information processing.

Herbert Alexander Simon was born in Milwaukee, Wisconsin on June 15, 1916. His father, Arthur Simon, migrated from Germany after earning his degree in electrical engineering. He was also an inventor and held several dozen patents. Later he became an independent patent attorney.

Herbert’s mother, Edna Marguerite Merkel, was an accomplished pianist. She was a third generation American having her roots in Prague and Köln. He had an elder brother, five year senior to him.

Herbert had his early education at the public elementary and high school in Milwaukee, which in his own words, provided “excellent general education”. At home too, his parents nurtured in him an early interest in books and music. The public library at Milwaukee also sustained his interest in various subjects.

However, the most important factor that provided him with a direction was his maternal uncle, Harold Merkel, a student of economics and a great debater. Although he died early, his memory was always alive in the family and his books on economics and psychology were preserved with care.

Over time, Harold Merkel not only became a role model for young Herbert Simon, but also inspired him to be a good debater. In order to defend unpopular topics like free trade and single tax, he began reading his uncle’s books. He thus began to grow an interest in social science and economics.

Meanwhile in 1942, as the research grant at Berkeley was exhausted, Simon joined the political science department of Illinois Institute of Technology in Chicago as a faculty member, remaining there till 1949. During this period, he met many well-known economists, especially the staff of the Cowles Commission for Research in Economics.

At that time, the Commission was located inside the University of Chicago and its staff members used to hold regular seminars. Simon now began to participate in those seminars and thus he began to study economics once again, this time going deeper into the subject.

In 1943, he published his first paper on tax incidence. Thereafter in 1947, he published the first edition of his famous book ‘Administrative Behavior: a Study of Decision-Making Processes in Administrative Organization’; a work that he kept on updating throughout his life.

Sometime now, he was also co-opted by Jacob Marschak to assist him in his work on the prospective economic effects of atomic energy. He was in charge of the macroeconomic parts of that study and in spite of his earlier publications he believed this work to be his actual initiation into analytical economics.

In 1948, he received a public assignment and played an important role in the creation of the Economic Cooperation Administration. The agency was designed to administer the Marshall Plan aid for the U.S. Government.

Simon’s biggest contribution to the field of economics was the concept of behavioral decision-making. His pioneering research in the area was inspired by his doctoral dissertation on the decision-making processes, which was later released as a book named “Administrative Behavior”. The book dealt with the behavioral and cognitive processes of making decisions. According to him, a decision should be correct and efficient and must be practical enough to be implemented and any decision that involves alternative should be towards an organizational goal. The task of decision-making is to select the alternative results in the more preferred set of all the possible consequences.The key to this work is the idea that human decision making results in satisficing than optimizing. According to Simon’s approach, the entrepreneur is substituted by a configuration of decision makers whose intellect is limited and cooperates to get the right solution for the troubles they would confront. In reality, people in large organizations cannot put all these into action for obtaining rational decisions. Due to the limitation of uncertainty of the future and the ability to process information, people ‘satisifice’ to result in satisfactory outcomes. People in the organization usually come up with decisions for certain goals, which are adjusted when the results do not match. In his book, he rejected the idea of ‘economic man’ who optimizes rather than introducing the concept of a businessman who satisfices.