Romantics, Mercenaries, and Behavioral Rationality

Abstract

Behavioral decision research focuses on cognitive biases and other barriers to economic rationality. However, if cognitive biases are costly to eliminate, the second-best solution to bounded rationality may be less rationality rather than more. I define the concept of behavioral rationality and discuss two extreme forms of strategizing, which I call Romantic and Mercenary. Using twentieth century humanitarian Albert Schweitzer as a case study, I discuss the optimization of economic and behavioral rationality. I argue that the success of behavioral strategy as a field does not depend on removing cognitive biases but on helping people deliver more effective strategic actions.

Citation

Powell, T.C. (2018), "Romantics, Mercenaries, and Behavioral Rationality", Behavioral Strategy in Perspective (Advances in Strategic Management, Vol. 39), Emerald Publishing Limited, Leeds, pp. 151-165. https://doi.org/10.1108/S0742-332220180000039011