Herbert A. Simon's article, "Rational Decision Making in Business Organizations," published in *The American Economic Review* in 1979, explores the application of decision theory to economic science, particularly in the context of business organizations. Simon argues that economic science has traditionally focused on the application of reason to resource allocation, but this approach has not adequately addressed the complexities of human behavior in organizations. Simon criticizes the narrow view that economics is concerned only with aggregate phenomena, such as full employment and resource allocation, and suggests that the descriptive theory of decision-making, including the theory of the firm, is a rich domain of rational human behavior that deserves more attention. He emphasizes the importance of understanding how decisions are made, not just the outcomes of those decisions. Simon discusses the development of decision theory, highlighting the contrast between classical theories of rational choice and behavioral theories. Classical theories assume perfect rationality, while behavioral theories account for bounded rationality, where decision-makers face limitations in knowledge, computational power, and time. Simon provides examples of empirical studies that support the assumptions of bounded rationality and critiques the classical theory's inability to explain certain phenomena. He also explores the implications of bounded rationality for normative decision theory, which aims to provide advice to decision-makers. Simon notes that as computational tools improve, the recommendations of normative decision theory will evolve, and this will influence actual decision-making practices in business firms, potentially leading to macroeconomic consequences. Finally, Simon traces the historical development of decision theory, including the revival of neoclassical theory and the challenges it faces in addressing the complexities of real-world decision-making. He concludes by emphasizing the need for a more balanced approach within the economics profession to address both neoclassical theory and descriptive decision theory.Herbert A. Simon's article, "Rational Decision Making in Business Organizations," published in *The American Economic Review* in 1979, explores the application of decision theory to economic science, particularly in the context of business organizations. Simon argues that economic science has traditionally focused on the application of reason to resource allocation, but this approach has not adequately addressed the complexities of human behavior in organizations. Simon criticizes the narrow view that economics is concerned only with aggregate phenomena, such as full employment and resource allocation, and suggests that the descriptive theory of decision-making, including the theory of the firm, is a rich domain of rational human behavior that deserves more attention. He emphasizes the importance of understanding how decisions are made, not just the outcomes of those decisions. Simon discusses the development of decision theory, highlighting the contrast between classical theories of rational choice and behavioral theories. Classical theories assume perfect rationality, while behavioral theories account for bounded rationality, where decision-makers face limitations in knowledge, computational power, and time. Simon provides examples of empirical studies that support the assumptions of bounded rationality and critiques the classical theory's inability to explain certain phenomena. He also explores the implications of bounded rationality for normative decision theory, which aims to provide advice to decision-makers. Simon notes that as computational tools improve, the recommendations of normative decision theory will evolve, and this will influence actual decision-making practices in business firms, potentially leading to macroeconomic consequences. Finally, Simon traces the historical development of decision theory, including the revival of neoclassical theory and the challenges it faces in addressing the complexities of real-world decision-making. He concludes by emphasizing the need for a more balanced approach within the economics profession to address both neoclassical theory and descriptive decision theory.