Bounded Rationality and Budgeting
This article discusses the theory of bounded rationality which had been introduced by Herbert Simon in the 1950s. Simon introduced the notion of bounded rationality stating that while decision-makers strive for rationality, they are limited by the effect of the environment, their information process...
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| Format: | Article |
| Language: | English |
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EconJournals
2016-10-01
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| Series: | International Review of Management and Marketing |
| Online Access: | https://www.econjournals.com/index.php/irmm/article/view/2786 |
| _version_ | 1797911743485181952 |
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| author | Mukdad Ibrahim |
| author_facet | Mukdad Ibrahim |
| author_sort | Mukdad Ibrahim |
| collection | DOAJ |
| description | This article discusses the theory of bounded rationality which had been introduced by Herbert Simon in the 1950s. Simon introduced the notion of bounded rationality stating that while decision-makers strive for rationality, they are limited by the effect of the environment, their information process capacity and by the constraints on their information storage and retrieval capabilities. Moreover, this article tries to specifically blend this notion into budgeting, using the foundations of incremental theory introduced by Charles Lindblom by the end of 1950s. The end of discussion shows that the use of intended rationality on public sector organizations will be through of implementing of incremental theory's rules and procedures.
Keywords: Bounded rationality, Budgeting, Incremental Budgeting
JEL Classifications: D81 G38 H61
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| first_indexed | 2024-04-10T11:45:27Z |
| format | Article |
| id | doaj.art-c6f5f6eac1854d8f985d0335136ea059 |
| institution | Directory Open Access Journal |
| issn | 2146-4405 |
| language | English |
| last_indexed | 2024-04-10T11:45:27Z |
| publishDate | 2016-10-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Review of Management and Marketing |
| spelling | doaj.art-c6f5f6eac1854d8f985d0335136ea0592023-02-15T16:17:21ZengEconJournalsInternational Review of Management and Marketing2146-44052016-10-0164Bounded Rationality and BudgetingMukdad Ibrahim0American University of Ras Al KhaimahThis article discusses the theory of bounded rationality which had been introduced by Herbert Simon in the 1950s. Simon introduced the notion of bounded rationality stating that while decision-makers strive for rationality, they are limited by the effect of the environment, their information process capacity and by the constraints on their information storage and retrieval capabilities. Moreover, this article tries to specifically blend this notion into budgeting, using the foundations of incremental theory introduced by Charles Lindblom by the end of 1950s. The end of discussion shows that the use of intended rationality on public sector organizations will be through of implementing of incremental theory's rules and procedures. Keywords: Bounded rationality, Budgeting, Incremental Budgeting JEL Classifications: D81 G38 H61 https://www.econjournals.com/index.php/irmm/article/view/2786 |
| spellingShingle | Mukdad Ibrahim Bounded Rationality and Budgeting International Review of Management and Marketing |
| title | Bounded Rationality and Budgeting |
| title_full | Bounded Rationality and Budgeting |
| title_fullStr | Bounded Rationality and Budgeting |
| title_full_unstemmed | Bounded Rationality and Budgeting |
| title_short | Bounded Rationality and Budgeting |
| title_sort | bounded rationality and budgeting |
| url | https://www.econjournals.com/index.php/irmm/article/view/2786 |
| work_keys_str_mv | AT mukdadibrahim boundedrationalityandbudgeting |