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Abstract The behavioral theorists have argued that in a world of uncertainty maximization models can offer very little help in explaining the behavior of firms and individuals since, when events are uncertain, apparently concrete maximands, such as the present value of the dis-discounted stream of profits, are no longer even well defined. In these circumstances the behaviorists have suggested that one must learn the firm’s decision patterns from direct observation rather than a priori considerations.
Baumöl et al. (1964) studied this question.