Posted on March 31, 2016 @ 08:15:00 AM by Paul Meagher
In my last blog I introduced the idea of simple rules and much of that blog focused on Herb Simon's thoughts on why simple rules are necessary (e.g., bounded rationality, limited cognitive capacity, pervasive uncertainty).
What can be confusing for people studying simple rules, or cognitive heuristics, is that you will encounter two different research programs on the use of heuristics in reasoning that offer different assessments on the value of heuristic reasoning.
One research program starts with Nobel laureate Herb Simon and his views on the importance of heuristics for achieving adaptation to the uncertain environment we find ourselves in. This could be called the "Ecological Rationality" research program.
Another research program starts with Nobel laureate Daniel Kahneman and his partner Amos Tversky and focuses on another aspect of heuristics, namely, that they can be fallible because when we use them we don't perform as well as normative rational models confronted with the same information. This could be called the "Heuristics and Biases" research program.
So in one research program (i.e., Ecological Rationality) you have heuristics portrayed as adaptive, and sometimes optimal, way to deploy our limited cognitive resources to address everyday uncertainties.
In another research program (i.e., Heuristics & Biases) heuristics are portrayed as a major source of fallacious reasoning that we might be able to correct by becoming aware of these heuristic biases.
These are very different ways to regard the value of heuristics and recent successful business books on behavioral economics have been more focused on showing the downsides to heuristics rather that the upsides. They teach us about heuristics so that we can be wary of supposedly common heuristic reasoning biases.
The notion of Simple Rules is potentially a way to avoid some of the baggage associated with the term heuristics but it is clearly a research program inspired by Herb Simon's framing of the role of heuristics in problem solving as more adaptive than flawed.
The book Simple Rules (2015) is an important contribution to the "Ecological Rationality" research program, especially as it pertains to business and entrepreneurial challenges. Always looming in the background when I read this stuff is the research program of Gerg Gigerenzer who has been one of the main torch bearer's for Herb Simon's bounded rationality research program. Their recent paper Heuristics as adaptive decision strategies in management (2014, PDF download) offers a nice account of how the Herb Simon research program has played out in the field of management.
So the point of this blog is to highlight the different influential research programs that have grown up around the notion of heuristic reasoning and which research program the Simple Rules approach best relates to (i.e., the bounded rationality or ecological rationality research programs). You can get very confused if you search out research on heuristics and you don't know this history.
It should also be noted, however, that in alot of the cognitive literature on heuristics these reasoning strategies are often viewed as baked into the hardware of our brains whereas Simple Rules are more like high level rules that we consciously formulate and chose to follow or not. They are also often more domain specific than the notion of cognitive heuristics is. There are interesting aspects of the Simple Rules notion that makes them not quite the same as the traditional notion of cognitive heuristics and that is one reason why the notion of Simple Rules potentially interests me - it may provide a more expanded way to account for productive competence in business than just relying upon Gerd's notion of fast and frugal reasoning strategies that are not as domain specific or consciously adopted.
I'll bring this discussion down to earth in my next blog when we discuss the use of Simple Rules as a way to approach thinking about how a business strategy should be formulated.