Carnegie School

The Carnegie School is a school of economic thought formed at the Graduate School of Industrial Administration of Carnegie Institute of Technology (CIT), the current Carnegie Mellon University. It is known for formulating two "seemingly incompatible" concepts: bounded rationality and rational expectations. The former was developed by Herbert A. Simon, along with James March, Richard Cyert and Oliver Williamson. The latter was developed by John F. Muth and later popularized by Robert Lucas Jr., Thomas Sargent, and others. [1][2]

Overview

The Graduate School of Industrial Administration (GSIA) was founded in the late 1940s, after receiving a grant by William Larimer Mellon Sr. to enable graduate instruction in business and economics for the engineers the university already produced. The founding dean was [George Leland Bach]], and among the first faculty hires were William W. Cooper and Herbert A. Simon. Other early appointees included Abraham Charnes, Richard Cyert, James G. March, Franco Modigliani and Merton Miller.

GSIA was set up as a "new look" business school, moving beyond the case-based method of instruction popularized by Harvard Business School to incorporate scientific methods of management. Simon and the frequent collaborators Charnes and Cooper received the John von Neumann Theory Prize for their pioneering contributions to operations research and management science.

The focus of the research was on organizational behavior and the application of decision analysis, management science, and psychology as well as theories such as bounded rationality to the understanding of the organization and the firm.

Highly influential works done by researchers at the Carnegie School include:

The interdisciplinary approach featured faculty at Carnegie Mellon's modern departments of economics, business, public policy, computer science, psychology, statistics and data science, and social and decision sciences.

References
  1. Raymond Augustine Bauer, Kenneth J. Gergen (1968). The study of policy formation. National Planning Association. p.115.
  2. Jens Beckert, Milan Zafirovski (2006). International encyclopedia of economic sociology. p.48
  3. Anderson, Marc H.; Lemken, Russell K. (2019). "An Empirical Assessment of the Influence of March and Simon's Organizations: The Realized Contribution and Unfulfilled Promise of a Masterpiece". Journal of Management Studies. 56 (8): 1537–1569. doi:10.1111/joms.12527. ISSN 1467-6486.
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