Introduction, 99. — I. Some general features of rational choice, 100.— II. The essential simplifications, 103. — III. Existence and uniqueness of solutions, 111. — IV. Further comments on dynamics, 113. — V. Conclusion, 114. — Appendix, 115.

Four different schools now to be found among economists, 398. — Assumptions made here, 399. — Conflicting views where the total demand for houses is inelastic, 400. — Brown's position substantially correct, 401. — But the "partial equilibrium" approach is open to certain objections, 404. — Separability of the tax into a tax on site value and a tax on building value, 405. — Houses in different locations not quantities of a single commodity but different competing commodities, 409. — Summary of conclusions, 411. — Mathematical appendix, 412.

Journal Article Further Comment Get access Herbert A. Simon Herbert A. Simon Bureau of Public Administration, University of California Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 55, Issue 2, February 1941, Pages 325–330, https://doi.org/10.2307/1882067 Published: 01 February 1941

The problem of controlling the rate of production of a single product can be stated in terms of servomechanism theory, and the well-developed methods of that theory employed to study the behavior of a control system. This is illustrated for a simple system, and a cost criterion is constructed for evaluating alternative decision rules or constructing an optimal rule. Laplace transform methods are introduced, and some of their elementary uses for studying the stability and steady-state behavior of systems are illustrated.

A model was constructed that incorporates rational grounds for the choice by two individuals between an employment contract and a contract of the ordinary kind (which we have called a sales contract). By a generalization of this model one can account for the fact that in an employment contract certain aspects of the workers's behavior are stipulated in the contract terms, certain other aspects are placed within the authority of the employer, and still other aspects are left to the worker's choice. Since administrative theory was interested in explaining behavior within the framework of employment relations, and economic theory in explaining behavior within the area of market relations, the model suggests one possible way of relating these two bodies of theory. The most serious limitations of the model lie in the assumptions of rational utility-maximizing behavior incorporated in it. (Author)

Economics