Beyond Bounded rationality: reassessing the models of cognition and collective learning within the IAD/SES framework

In this communication, we discuss the prominent role played by the concept of Bounded Rationality as defined by Herbert Simon and the related debates within the field of cognitive psychology on the broad tradition of New Institutional Economics (D. North, O. Williamson,…), and especially within the work of Elinor Ostrom and the IAD/SESF (0strom 2005, 2010). Over the last decades, a number of critics have emerged arguing that the concept of bounded rationality as defined by Herbert Simon was “much cited, but not used” (Foss 2015) suggesting the need to adopt a broader approach. In the IAD/SES literature, the role of knowledge systems, social norms and collective learning are considered as key points for the adaptive and sustainable governance of social-ecological systems (Ostrom 2005, Pahl-Wolst 2009, etc). Similarly, a number of research directions were identified by Douglas North (2005) suggesting a possible shift of paradigm moving from the early conception of bounded rationality focusing on the cognitive limits of the mind to alternative models of situated /distributed cognition (Brown and Duguid 1991, Hutchins 1995, Engestrom 1999). Our analysis suggests the existence of strong connections between Elinor Ostrom’s analysis and the extensions proposed by Douglas North (2005) towards the adoption of alternative models of situated/distributed cognition. Whereas the rational choice paradigm and approaches based on ecological rationality and smart heuristics rests on the early conception of Herbert Simon that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision, recent models of situated cognition consider on the reverse cognitive resources in the environment systematically support and complete cognitive individual abilities of individual agents or organization (Denzau and North 1997, Mantzavinos et al. 2004). After a review of recent advances and theoretical debates within mainstream cognitive psychology, we analyze the consequences of this reversal of the analytical categories for the IAD/SES frameworks, thus clarifying its possible contribution to a better understanding of the processes of organizational and institutional change and the foundation of a cognitive institutionalism.