Bounded rationality and hierarchical complexity: Two paths from Simon to ecological and evolutionary economics

Abstract

This paper examines two paths by which the work of Herbert Simon has influenced the development of ecological and evolutionary economics: bounded rationality and hierarchical complexity. It argues that there is scope for further consideration of the implications of these ideas, particularly their inter-relation. This is illustrated through some recent ideas on the co-evolution of technologies and institutions. This is related to understanding transitions of technological systems, and how these might be steered or modulated towards greater sustainability.