3 - The “Big 3.” Simon, Katona, Leibenstein

Abstract

Katona, Leibenstein, and Simon are the “Big 3” of the old behavioral economics. Why are they the Big 3? Their names are most often mentioned by others in terms of “early” behavioral economics. They wrote convincingly about homo economicus, and in doing so they began knocking him off his pedestal. Without this behavioral economicus would never exist. With respect to the Big 3’s writings, Leibenstein wrote about, among other things, multiple-selves, gift exchange, social norms, consumer interdependence, non-allocative efficiency, and less than perfect rationality. Katona wrote about, among other things, ECONS vs HUMANS, expectations, aspirations, adaptive behavior, macro-behavioral theory, procedural rationality, and less than perfect rationality. Among other things, Herbert Simon wrote about bounded rationality, intuition (System 1) and logical thinking (System 2), ECONS vs HUMANS, satisficing, rejection of as if theorizing, learning theories in economics and psychology, rationality in economics and psychology, the nature of human knowledge (tacit knowledge), and less than perfect rationality.