Essays in Behavioral Strategy : Re-biased Search, Misconceived Complexity, and Cognitive Aliens.

Summary This work focuses on the idea that organizational rationality is bounded: decision-makers seek solutions that offer minimal satisfaction and think in a way that is typical for humans. The thesis explores this interaction between the organizational search process and decision makers' cognition and demonstrates that certain biases (distortions) in characteristic aspects of our thinking can be instruments of behavioral strategy.As a starting point, I complement the first primitive of bounded rationality, i.e. the generation and evaluation of alternatives, with embedded elements of human cognition, such as intuitive thinking, specifically affect heuristics, and imperfect mental representations. Using computational models, I study the effects of biases corresponding to these elements of human cognition (affective preferences and systematic errors in mental representations) over time as organizations adapt to complex environments. This allows me to identify the life cycles of the elements of human cognition and to show that organizations should manage (rather than eliminate) certain biases. Finally, I make proposals and empirically test a subset of my predictions.In conclusion, this work aims to advance the emerging theory of behavioral strategy by jointly considering different primitives of bounded rationality and integrating them with existing knowledge in organizational science. A general question motivating this work is how organizations can manage the many limitations of human rationality.