Two Faces of Search: Alternative Generation and Alternative Evaluation

Thorbjørn Knudsen, Daniel A. Levinthal

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

At its core, a behavioral theory of choice has two fundamental attributes that distinguish it from traditional economic models of decision making. One attribute is that choice sets are not available ex ante to actors, but must be constructed. This notion is well established in our models of learning and adaptation. The second fundamental postulate is that the evaluation of alternatives is likely to be imperfect. Despite the enshrinement of the notion of bounded rationality in the organizations literature, this second postulate has been largely ignored in our formal models of learning and adaptation. We develop a structure with which to capture the imperfect evaluation of alternatives at the individual level and then explore the implications of alternative organizational structures, comprising such individual actors, on organizational decision making.
Original languageEnglish
JournalOrganization Science
Volume18
Issue number1
Pages (from-to)39–54
Number of pages16
ISSN1047-7039
Publication statusPublished - 1. Jan 2007

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Decision making
Economics
Evaluation
Behavioral theory
Choice sets
Organizational decision making
Bounded rationality
Formal model
Organizational structure

Keywords

  • organizational search; bounded rationality; organizational decision making

Cite this

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Two Faces of Search : Alternative Generation and Alternative Evaluation. / Knudsen, Thorbjørn; Levinthal, Daniel A.

In: Organization Science, Vol. 18, No. 1, 01.01.2007, p. 39–54.

Research output: Contribution to journalJournal articleResearchpeer-review

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