组织的经济学与管理学（英文）ch12 Limited cognition and organisation.ppt

Chapter 12 Limited cognition and organisation George Hendrikse Fields Behavioural accounting behavioural finance Economic psychology / consumer behaviour Organisational behaviour Strategic decision making Figure VI.1: Positioning of bounded rationality approaches Firm from an evolutionary perspective Making mistakesForgettingLimited reasoning capabilities Degree of rationality Ratio of the cognitive capacities of the decision maker and the complexity of the problem. Types of rationality Complete: ratio is 1 Bounded: ratio between 0 and 1 Procedural: ratio is (almost) 0 If the degree of rationality is smaller than 1, then there will be a bias in behaviour (compared to the complete rationality case). Increase ratio by increasing cognitive capacities, e.g. education decreasing the complexity of the problem, e.g. by splitting up the problem, using computers Two types of bounded rationality Deductive Inductive Partitioning Deductive bounded rationality How to optimally allocate a limited number of cognitive units in a complex problem? How to make (deductive) bounded rationality operational? Number of partitions of the set of possible events / states. Cognitive capacities of a person The cognitive capacities of a person are the number of partitions a person is able to make in response to a particular problem. Complexity of a problem The complexity of a problem is the number of partitions that is needed to distinguish all aspects / states / events of a problem. Example: Colour recognition problem Possible states: R: Red G: Green W: White D: Dark Complexity of the colour recognition problem R | G | W | D Conclusion: 3 partitions implies complexity 3. Figure 12.1: Colour recognition capacities of different decision makers Example: Organisational structure Functional Divisional Functional structure Divisional structure Information compression from employees to the boss is necessary due to limited cognitive capacities of the boss. However, informati