A Behavioral Theory of the Firm

A Behavioral Theory of the Firm
Cover of the second edition
AuthorRichard Cyert and James March
Publication date
1963
ISBN0-631-17451-6

The behavioral theory of the firm first appeared in the 1963 book A Behavioral Theory of the Firm by Richard M. Cyert and James G. March.[1] The work on the behavioral theory started in 1952 when March, a political scientist, joined Carnegie Mellon University, where Cyert was an economist.[2]

Before this model was formed, the existing theory of the firm had two main assumptions: profit maximization and perfect knowledge. Cyert and March questioned these two critical assumptions.[3]