Bounded Rationality

How to Design Impactful Laws - Treatise on Legistic and Legisprudence  in the Age of Soft Law

La loi peine toujours plus à « faire la loi » à l’ère du droit souple et de la globalisation. Afin de produire un impact législatif aussi juste qu’optimal, la légistique doit proposer dans ce nouveau contexte une démarche permettant d’intégrer démocratiquement la force du droit souple dans le processus législatif, de pair avec le contrôle de constitutionnalité des lois, sans se contenter d’améliorer la clarté des textes.

Ce traité présente les fondements de la légistique, constituée historiquement pour faire recouvrer à la loi sa rationalité, son efficacité, sa clarté et sa concision.

Il explique comment :
- créer une analyse d’impact intégrée qui prenne en compte toutes les composantes du développement durable parmi la multiplicité des instruments d’action tant publics que privés (légistique matérielle prospective) ;
- formuler des textes clairs et cohérents (légistique formelle) ;
- évaluer rétrospectivement les effets des lois et des politiques publiques par des méthodes appelées à devenir participatives (légistique matérielle rétrospective).

Ce traité porte sur le droit suisse et le droit de l’Union européenne, avec des aspects de droit comparé. Il intègre de manière critique les développements en économie comportementale, en sciences affectives, en intelligence artificielle et en sciences de la gouvernance et de la régulation.

Il s’adresse non seulement aux juristes mais aussi aux spécialistes en sciences sociales, au personnel politique et administratif ainsi qu’à toute personne intéressée par le pilotage des politiques publiques.

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How to Design Impactful Laws: Treatise on Legistic and Legisprudence  in the Age of Soft Law

In an age of soft law and globalization, it has become increasingly difficult for the law to “lay down the law”. To ensure in this new context that its impact is as fair as optimal, legistic must go beyond mere clear legislative drafting: it has to propose a method for integrating the strength of soft law in the democratic law-making process.
This treatise presents the foundations of the sciences of legislation (legistic or legisprudence), historically constituted to make laws more rational and effective, clearer and shorter.

It explains how to:
- create an integrated impact assessment that factors in all the components of sustainable development, among the multiplicity of public and private policy instruments (ex ante material legistic);
- formulate and communicate clear and coherent texts (formal legistic);
- retrospectively evaluate laws and public policies through methods which should become more participative (ex post material legistic).

This treatise is based on Swiss and European Union law, with a look on comparative law. It includes developments in regulation and regulatory governance, behavioral economics, affective sciences and artificial intelligence.

This work is intended not only for lawyers, but also for social scientist, members of political and administrative authorities, and anyone interested in public policy evaluation.

Some of Law and Economics’ basic claims have come to be criticized as a result of empirical findings that question their viability. Particularly, the premise that agents consistently act rationally and with their self-interest in mind seems problematic. What the consequences of the criticism mean for Law and Economics’ tenability depends largely on the questions whether (1) some elements are unassailable to the alternative’s objections and (2) the alternative is a systematic whole. It is argued that Law and Economics may be salvaged, if it is minimized and its ambitions are tempered. This means focusing on the stable, a priori, elements inherent to it.

The massacre of almost 50 Maidan protesters on February 20, 2014 was a turning point in Ukrainian politics and a tipping point in the conflict between the West and Russia over Ukraine. This mass killing of the protesters and the mass shooting of the police that preceded it led to the overthrow of the pro-Russian government of Viktor Yanukovych and gave a start to a civil war in Donbas in Eastern Ukraine, Russian military intervention in Crimea and Donbas, and an international conflict between the West and Russia over Ukraine. A conclusion promoted by the post-Yanukovych governments and the media in Ukraine that the massacre was perpetrated by government snipers and special police units on a Yanukovych order has been nearly universally accepted by the Western governments, the media, and many scholars. The Ukrainian government investigation identified members of the special company of Berkut as responsible for killings of the absolute majority of the protesters, but did not release any evidence in support, with the exception of videos of the massacre.
              The question is which side organized the “snipers’ massacre.” This paper is the first academic study of this crucial case of the mass killing. It uses a theory of rational choice and a Weberian theory of instrumental rationality to examine actions of major actors both from the Yanukovych government, specifically various police and security forces, and the Maidan opposition, specifically its far right and oligarchic elements, during the massacre.
          The paper analyzes a large amount of evidence from different publicly available sources concerning this massacre and killings of specifics protesters. Qualitative content analysis includes the following data: about 1,500 videos and recordings of live internet and TV broadcasts from mass media and social media in different countries(some 150 gigabytes), news reports and social media posts by more than 100 journalists covering the massacre from Kyiv, some 5,000 photos, and nearly 30 gigabytes of publicly available radio intercepts of snipers and commanders from the special Alfa unit of the Security Service of Ukraine and Internal Troops, and Maidan massacre trial recordings. This study also employs field research on site of the massacre, eyewitness reports by both Maidan protesters and government special units commanders, statements by both former and current government officials, estimates of approximate ballistic trajectories, bullets and weapons used, and types of wounds among both protesters and the police. This study establishes a precise timeline for various events of the massacre, the locations of both the shooters and the government snipers, and the specific timeline and locations of nearly 50 protesters’ deaths. It also briefly analyzes other major cases of violence during and after the “Euromaidan.” This study includes two video appendixes.
            This academic investigation concludes that the massacre was a false flag operation, which was rationally planned and carried out with a goal of the overthrow of the government and seizure of power. It found various evidence of the involvement of an alliance of the far right organizations, specifically the Right Sector and Svoboda, and oligarchic parties, such as Fatherland. Concealed shooters and spotters were located in at least 20 Maidan-controlled buildings or areas. The various evidence that the protesters were killed from these locations include some 70 testimonies, primarily by Maidan protesters, several videos of “snipers” targeting protesters from these buildings, comparisons of positions of the specific protesters at the time of their killing and their entry wounds, and bullet impact signs. The study uncovered various videos and photos of armed Maidan “snipers” and spotters in many of these buildings. The paper presents implications of these findings for understanding the nature of the change of the government in Ukraine, the civil war in Donbas, Russian military intervention in Crimea and Donbas, and an international conflict between the West and Russia over Ukraine.

The paper focuses on empirical studies of a class of very simple games of the reward allocation, dictator and ultimatum type. It is demonstrated that true explanations of social phenomena cannot conceivably be derived in terms of the perfect rationality concept underlying neo-classical economics. Analyzing the simple paradigm games it is explored in some depth, if speculatively, how experimental game theory might bring us closer to a new synthesis or the nucleus of a general theory of "games and boundedly rational economic behavior" with more explanatory power. 1. Introduction and overview Evaluated in entrepreneurial terms neo-classical economics is a success among the social sciences. The numbers of professionals is ever increasing and economics is well respected in adjacent fields of social inquiry. Some of its core techniques are widely used by other social scientists while economics is so self- confidently tackling all sorts of social science issues within its "o...

ABSTRACT In this paper we investigate how cognitive ability influences behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond at all. Our results suggest that, in strategic environments, higher cognitive ability translates into better analytic reasoning and a better ‘theory of mind’

Research on the Brexit negotiations has linked the problems faced by Britain to flawed assumptions in the UK's perception of EU interests. These include the ideas that the EU would be open to compromise on key principles, that it would offer the UK a bespoke relationship, that national capitals would respond favourably to bilateral initiatives, and that EU unity would not hold. Yet the origins of these assumptions have been subject to little systematic scrutiny. How did such wrong-headed assumptions about the EU's interests emerge? Drawing on insights from bounded rationality we identify three aspects of the decision-making environment linked with biased thinking: (1) ill-fitting routines and lessons, (2) a lack of decision-making openness, and (3) a lack of EU expertise and contact. We demonstrate our argument using data obtained from interviews in Brussels and London in 2017-18 and accounts of those involved in the decisions.

Replying to Queen Elizabeth II who in November 2008 asked why so few economists had warned about the emerging financial crisis, a group of eminent economists of the British Academy, claimed that while this failure had many causes,
the most important was principally a failure of the collective imagination of many bright people, to understand the risks to the system as a whole. The paper suggests that this failure is due also to the still heavy influence of the paradigm of rational
expectations, that did not provide the intellectual tools to grasp the signs of the impending financial crisis. The paper explores the development of Muth’s rational expectations hypothesis and the parallel development of Simon’s idea of bounded
rationality—two opposite views about economic behavior that originated in the same context, during the early 1960s at Carnegie Mellon. It is shown that the latter, while marginalized for decades from the core economic ideas, generated a wide
development in cognitive psychology, problem solving and experimental economics that grew up in the last decades and now permit a more profound analysis of human behavior in economic and organizational contexts, that can be the seed of a new thinking in economics. The challenge for economists is to use this new toolbox to incorporate in their models real human behaviors, getting out from the economy of wishful thinking.

The objective of this paper is to provide a critical analysis of the Kantian notion of freedom (especially  the  problem  of  the  third  antinomy  and  its  resolution  in  the  critique  of  pure reason); its significance in the contemporary debate on free-will and determinism, and the possibility  of  autonomy  of  artificial  agency  in  the  Kantian  paradigm  of  autonomy.  Kant's resolution  of  the  third  antinomy  by  positing  the  ground  in  the  noumenal  self  resolves  the problem of antinomies; however, invites an explanatory gap between phenomenality and the noumenal self; even if he has successfully established the compatibility of natural causality and non-natural causality through his transcendental argument. This paper is also devoted to establish the plausibility of the knowledge claim that Kantian reduction of phenomenality has served half of the purpose of the AI scientists on the possibility of Artificial Autonomous Agency.

Delusions are explanations of anomalous experiences. A theory of delusion requires an explanation of both the anomalous experience and the apparently irrational explanation generated by the delusional subject. Hence, we require a model of rational belief formation against which the belief formation of delusional subjects can be evaluated. Method. I first describe such a model, distinguishing procedural from pragmatic rationality. Procedural rationality is the use of rules or procedures, deductive or inductive, that produce an inferentially coherent set of propositions. Pragmatic rationality is the use of procedural rationality in context. I then apply the distinction to the explanation of the Capgras and the Cotard delusions. I then argue that delusions are failures of pragmatic rationality. I examine the nature of these failures employing the distinction between performance and competence familiar from Chomskian linguistics. Results. This approach to the irrationality of delusions reconciles accounts in which the explanation of the anomalous experience exhausts the explanation of delusion, accounts that appeal to further deficits within the reasoning processes of delusional subjects, and accounts that argue that delusions are not beliefs at all. (Respectively, one-stage, two-stage, and expressive accounts.) Conclusion. In paradigm cases that concern cognitive neuropsychiatry the irrationality of delusional subjects should be thought of as a performance deficit in pragmatic rationality.

The book introduces Tadeusz Kotarbiński’s philosophy of action into the mainstream of contemporary action-theoretical debates. Piotr Makowski shows that Kotarbiński–Alfred Tarski’s teacher and one of the most important philosophers of the renowned Lvov-Warsaw school—proposed a groundbreaking, original, and (in at least a few respects) still fresh perspective in action theorizing. The book examines and develops Kotarbiński’s ideas in the context of the most recent discussions in the philosophy of action. The main idea behind Kotarbiński’s action theory—and thus, behind this book—is the significance of the philosophical investigations of the general conditions of effectiveness, efficiency, and economy of intentional actions. Makowski presents and reinterprets Kotarbiński’s views on these dimensions of our activities and sheds new light on the most important areas of action theory.

Decision making in economics has been always intertwined with the concept of rationality. However, neoclassical economic literature has been dominated by a specific notion of rationality, namely, perfect rationality, characterized by the assumption of consistency and by the maximization hypothesis. Herbert Simon, in his long research activity, questioned this concept of perfect or global rationality, suggesting a different vision, based on empirical evidence and regarding an individual's choices. He challenged the neoclassical theory of global rationality, suggesting his notion of bounded rationality, a satisficing (instead of optimizing) behavior, and the relevance of procedural rationality to understand the process of thought of decision makers. Thus, this paper focuses on Simon's notion of bounded rationality, since bounded rationality remains the hallmark of his theoretical contribution. First, the paper examines the economic decision process in the neoclassical theory and Simon's notion of bounded rationality. Then, it analyzes in depth Simon's behavioral model of rational choice, underlining the relevance of satisficing behavior and procedural rationality. Finally, it suggests an assessment of the concept of bounded rationality.

he purpose of this paper is to study the relationship between rationality and decision making. As a specific
objective it will be explained the benefit of learning in the decision making process derived from its results.
The research question is: How does bounded rationality impact the decision making of organizations? The
initial hypothesis is that the organization, as a social system, seeks to maintain the balance between the
behavior that determines the positions of people and the structure of values and beliefs shared among them,
but that is bounded to the rationality of the decision maker. The research method used is descriptive, being a
qualitative analysis, that follows from the understanding of the behavioral theory of the firm also the
behavioral decision theory, in terms of behavioral decision-making processes and the analysis through
learning. The main conclusion is that bounded rationality occurs when companies lack context information
of the results of their actions, being forced to make less than optimal decisions because they have to adjust
to the conditions in which they operate. Decisions involve a commitment of large amounts of resources of
the organization for the fulfillment of the objectives and purposes of the organization through the
appropriate means. These means can be translated into models that help reduce the limits of rationality in
organizations

The purpose of this paper is to study the relationship between rationality and decision making.
As a specific objective it will be explained the benefit of learning in the decision making process
derived from its results. The research question is: How does bounded rationality impact the
decision making of organizations? The initial hypothesis is that the organization, as a social
system, seeks to maintain the balance between the behavior that determines the positions of
people and the structure of values and beliefs shared among them, but that is bounded to the
rationality of the decision maker. The research method used is descriptive, being a qualitative
analysis, that follows from the understanding of the behavioral theory of the firm also the
behavioral decision theory, in terms of behavioral decision-making processes and the analysis
through learning. The main conclusion is that bounded rationality occurs when companies lack
context information of the results of their actions, being forced to make less than optimal
decisions because they have to adjust to the conditions in which they operate. Decisions involve
a commitment of large amounts of resources of the organization for the fulfillment of the
objectives and purposes of the organization through the appropriate means. These means can
be translated into models that help reduce the limits of rationality in organizations.

Entrée du "dictionnaire des conventions"  édité en 2016 par Ph. Batifoulier, Franck Bessis, Ariane Ghirardello, Guillemette de Larquier, Delphine Remillon, aux presses universitaires Septentrion. Elle expose l'originalité et la profondeur du concept de rationalité procédurale développée par Olivier Favereau, en comparaison avec les approches de Herbert Simon et Jürgen Habermas.

This paper considers the relation between the exploration of new possibilities and the exploitation of old certainties in organizationalearning. It examines some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space, and the effects of ecological interaction. Two general situations involving the development and use of knowledge in organizations are modeled. The first is the case of mutual learning between members of an organization and an organizational code. The second is the case of learning and competitive advantage in competition for primacy. The paper develops an argument that adaptive processes, by refining exploitation more rapidly than exploration, are likely to become effective in the short run but self-destructive in the long run. The possibility that certain common organizational practices ameliorate that tendency is assessed.

Purpose – Why and how do cognitive distortions in managerial decision making occur? All organizations are imperfect systems (Katz and Khan, 1966), with wrong decisions often just round the corner. As a consequence, addressing these important questions continues to be particularly lively in the management development area, especially in terms of its intended contribution to the de-biasing activity. Thus, through this critical review article we aim to provide the current scientific dialogue on the topic with updated lenses, which can also be innovative from some aspects. Design/methodology/approach – Our review framework is based on the recent, impactful article on biases in managerial decision making by Kahneman et al. (2011), and on Bazerman and Moore’s (2013) perspective on emanating heuristics, considered as the causes of biases. Accordingly, we derive four intertwined thematic clusters of heuristics, through which we systematically group and critically analyze the management literature mostly published on the topic since 2011. Findings – From the analyzed clusters we propose an integrative framework of emanating heuristics, which focuses on the co-evolving relationships and potentially self-reinforcing processes in and between them. Originality/value – The value of our contribution is threefold: 1) from a methodological perspective, to our knowledge, the studies adopted as the basis of our analysis have not yet been simultaneously used as a comprehensive ground for updated reviews on this topic; 2) from a conceptual perspective, the emerging integrative co-evolutionary framework can help explain the dangerous connections among cognitive traps and emanating heuristics; 3) from a practical perspective, our resulting framework can also be helpful for future de-biasing attempts in the business arena.

Using equifinality as a mode of methodology, this research, underpinned by Bourdiusian Field Theory, is set in inner-city Dublin. By analysing the life narratives of thirteen men in recovery, a thematic mode of analysis sought to gain an understanding of how social injustice can create a distorted value system, as the "losers" in Neoliberal Dublin respond, close ranks and gradually loosen the ties to conventional society.  This is a paper, set in pragmatist philosophy, with an aim to creating an alternative viewpoint to the development of maladaptive behaviours, by groups stigmatised due to social injustice.

In this work I tackle three different questions about rationality in order to clarify, to the extent possible, what we usually understand with this word, how we could sort the different notions that we find in academic discussions, and, finally, how it has become –during 20th century– a widespread means for describing human behaviour and for justifying and prescribing it according with propounded descriptive models, taking advantage of the normative dimension that rationality appears to have. Hence, first of all I study the different senses of terms such as rationality, rational, reason, logic and others using several dictionaries and encyclopedias. This analysis reveals that many of them are polysemous terms that bring different normativities and even show connotations that facilitate confusing rhetorical uses. In the second place, I review several widespread distinctions about rationality that we find in different fields of knowledge, and I propose a meta-theoretical framework in order to classify them. Afterwards, I show several examples of its application. However, this meta-theoretical framework is not limited to rationality, but it also could be used in the meta-analysis of other concepts, becoming a general-purpose tool for analytic philosophy. Finally, I briefly present the origins of the homo economicus notion in political economy and how it became in 20th century the rational man of the neoclassical economics, source of many discussions in several disciplines, together with the rationality of science. In this travel I emphasize the justificative interests underlying, many times, the use of the terms related to rationality, and the different normativities that they bring with them. All of this leads me to conclude that it is advisable to limit the use of these terms in favor of more precise and informative alternative ones.

Resumen en español:
En el presente trabajo abordo tres cuestiones sobre la racionalidad con el objeto de esclarecer, en la medida de lo posible, qué entendemos habitualmente con esta palabra, cómo podríamos poner un poco de orden respecto a las distintas nociones de la misma que existen en las discusiones académicas, y, finalmente, cómo se ha convertido en el siglo XX en un recurso muy extendido tanto para describir el comportamiento humano como para justificarlo y prescribirlo según los modelos descriptivos postulados, aprovechando la dimensión normativa que parece poseer. Así pues, en primer lugar estudio las distintas acepciones de términos como racionalidad, racional, razón, lógica y otros que aparecen en varios diccionarios y enciclopedias. Este análisis revela que en su mayoría son términos polisémicos que invocan distintas normatividades y que incluso exhiben connotaciones que facilitan confusos usos retóricos. En segundo lugar, reviso algunas de las distinciones sobre la racionalidad más extendidas en distintas áreas del saber y planteo un marco metateórico capaz de clasificarlas, tras lo cual muestro algunos ejemplos ilustrativos de su aplicación. El marco metateórico propuesto, sin embargo, no está limitado a la racionalidad, sino que podría ser útil en general para el quehacer de la filosofía analítica, ya que en principio podría utilizarse en el metaanálisis de otros conceptos. Finalmente, hago un breve recorrido histórico sobre cómo surgió la noción de homo economicus en economía política y cómo más tarde esta se convertiría en el hombre racional de la escuela neoclásica, fuente de numerosos debates en una gran variedad de disciplinas, junto a la racionalidad de la ciencia. En todo este periplo resalto los intereses apologéticos que subyacen en muchas ocasiones al uso de los términos indicados, así como las normatividades de diversa índole que estos invocan. Todo ello me lleva a la conclusión de que sería muy conveniente restringir el uso de tales términos en favor de otros alternativos más precisos e informativos.

This article addresses major arguments in the controversy about the “rationality” of moral behavior: can moral behavior be explained by rational choice theory (RCT)? The two positions discussed are the incentives thesis (norms are incentives as
any other costs and benefits) and the autonomy thesis claiming that moral behavior has nothing to do with utility. The article analyses arguments for the autonomy thesis by J. Elster, A. Etzioni, and J. G. March and J. P. Olsen. Finally, the general claim is discussed whether norm following and norm emergence are utility maximizing. The conclusion is that the autonomy thesis is not tenable if one applies a wide subjectivist, social psychological version of RCT that includes the assumption of “bounded rationality.” The autonomy thesis is only compatible with a narrow version of RCT that excludes internal outcomes and that refers to norms that do not have external outcomes. It is argued that such a narrow version is not capable of explaining many forms of behavior social scientists are interested in.

En este trabajo estudio las implicaciones que diferentes nociones de racionalidad acotada, razonamiento heurístico y sesgos cognitivos tienen para la elaboración de políticas públicas. Reviso con especial interés la discusión sobre el paternalismo libertario, donde la noción de empujones suaves (nudges), basada en las heurísticas y sesgos de Kahneman y Tversky, se ve cuestionada por los partidarios de las heurísticas rápidas y frugales del grupo ABC (liderados por Gigerenzer), quienes proponen la noción de "impulsos" (boosts) educativos en abierta oposición a los empujones. Mientras que los primeros buscan usar los sesgos para llevar a los agentes a tomar decisiones predecibles, los segundos buscan hacer desaparecer los sesgos por medio de educación. Planteo que esta discusión tiene que verse en0 un contexto más amplio, donde ambos proyectos, si bien tienen importantes diferencias, tienen algunos supuestos comunes que los hacen ser parte de una misma tradición de pensamiento que puede remontarse a los trabajos pioneros de Herbert Simon. Dentro de esos supuestos hay uno que es muy problemático: el supuesto de cognición individualista, que ha llevado a la idea de que las heurísticas están en la cabeza de los agentes, y que estas son fijas y ya dadas. Cuestionar ese supuesto nos puede llevar a tener una noción más social del razonamiento heurístico, donde podemos ver que estas están estructuradas por lo que otros agentes consideran conomiento, hábitos, instituciones y artefactos, que en su conjunto forman nichos cognitivos que llevana  los agentes a tener patrones de comportamiento recurrentes. Esto nos lleva a plantear la idea de que las heurísticas descritas por Gigerenzer y Kahneman  refieren a diferentes contextos de inferencia (estructuras heurísticas), que los llevan desarrollar diferentes propuestas de política pública que abordan diferentes problemas. Sin embargo, si ponemos en el centro del diseño de las políticas públicas el cambio de hábitos, esto nos lleva a a la ideade que podemos usar de manera complementaria y coordinada diferentes empujones e impulsos. Esto podemos hacerlo mediante el diseño de planes integrales de política pública que busquen usar de manera complementaria empujones, impulsos, incentivos, política de redistribución de la riqueza, prohibiciones selectivas entre otros instrumentos que nos ayuden a modificar los nichos cognitivos que estructuran los patrones de comportamiento de los agentes

This research aims to investigate a new approach of financial decision-making so-called " Neurofinance " which comes recently to the center of the many discussions as a new way to scholars in management and accounting analyze more consistently some factors that affect the financial decision-making. One of the main objectives of this paper is the development of a systematic review adopted from Mousnad et al. (2014) by a search of neurofinance papers in order to organize the ideas, methodologies, processes, and main issues addressed to this subject. The results showed a relevant number of articles, which made direct contributions to the topic. The authors' network shows a scattering of the writers and only three of them has more than two public works regarding this topic. After a review of all articles, it is concluded that the debate on neurofinance is still in the embryonal stage, but their findings are getting attention from research centers around the world. Finally, the present paper is important not only for the value of this systematic review, but also to become a guide to assist scholars interested in deep diving in neurofinance, by promoting a broader overview about what has been studied within this emerging field of finance, serving as a theoretical summary, including advantages and disadvantages to start studies of neurofinance.

Each organization succeeds or fails with its decisions, and each organization makes continuous decisions during its period of existence. Although institutional theory introduces new decision-making mechanisms, organizations generally choose the classic rational decision-making path. Herbert Simon's thoughts have an important place in rational decision-making theory. Simon criticized the classical rational decision-making theory, also developed the bounded rationality in this sphere.

Der folgende Beitrag stellt drei soziologische Kritikpunkte am Konzept rationalen Entscheidens dar. Genauer gesagt werden drei kritische Perspektiven auf zweckrationales Handeln vorgestellt, da in weiten Teilen der Soziologie der Handlungsbegriff eine prominentere Rolle spielt, als der Begriff des Entscheidens. Dabei wird erstens die mit Max Weber in Verbindung gebrachte Vorstellung erörtert, wonach zweckrationales Handeln nur eine mögliche Handlungsorientierung neben anderen und zudem vor allem von analytischer Bedeutung ist. Zweitens wird die Auffassung von Talcott Parsons vorgestellt, der zufolge auch zweckrationale Handlungen eine normative Basis haben und schließlich wird drittens die systemtheoretische Perspektive nachgezeichnet, aus welcher die Rationalität sozialer Systeme weder als Aggregat rationaler Einzelentscheidungen verstanden, noch durch hierarchisch organisierte Zweckverbände sichergestellt werden kann. Die Soziologie als entscheidungsfeindliche Disziplin?

Phronetic organizational research is an approach to the study of management and organizations focusing on ethics and power. It is based on a contemporary interpretation of the Aristotelian concept phronesis, usually as ‘prudence’. Phronesis is the ability to think and act in relation to values, to deliberate about ‘things that are good or bad for humans’ in the words of Aristotle (1976:1140a24–b12). Phronetic organizational research effectively provides answers to the following four value-rational questions, for specific problematics in management and organization studies: 1. Where are we going with this specific management problematic? 2. Who gains and who loses, and by which mechanisms of power? 3. Is this development desirable? 4. What, if anything, should we do about it?

The purpose of this research is to know whether or not stock prices follow Geometric Brownian Motion (GBM) in Indian stock markets. In this connection, this study has attempted to examine whether or not the simulated stock prices demonstrate accuracy of prediction relative to the actual stock prices. One-year, three-year, and five-year data of the historical stock prices of 42 stocks constituted in S&P BSE Sensex 50 Index were used as sample of the study. The data were extracted from Bloomberg database. This research has shown that the GBM Monte Carlo simulation is effective in predicting future stock prices of three-month period based on the historical data of stock prices of the past one year. This study is original in the Indian context as it has positioned GBM method of Monte Carlo simulation against the theoretical premises of the theories of bounded rationality and efficient market hypothesis.