Richard Cyert

American economist, statistician (1921-1998)
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Richard Michael Cyert (July 22, 1921 – October 7, 1998) was an American economist, statistician and organizational theorist, who served as the sixth President of Carnegie Mellon University in Pittsburgh, Pennsylvania, United States, known from his seminal 1959 work "A behavioral theory of the firm" co-authored with and James G. March.


  • In recent years there has been increased interest in the effects of internal communication on decision processes. A number of hypotheses relating the bias in information to the final decision have been proposed. In this paper we discuss two laboratory experiments which were designed to test two such hypotheses. The first experiment tests the hypothesis that cost and sales estimations are made with the implicit assumption that a biased pay-off structure exists. The second experiment tests explicitly the effects of biased and unbiased pay-off structures on estimation within an organization. An analysis of the data for the two experiments is made and some implications for further research are drawn from the results.
    • Richard Cyert, James G. March, William H. Starbuck. (1961) "Two experiments on bias and conflict in organisational estimation," Management Science, 254–64; Abstract
  • Effective retention is heavily dependent on recruiting students with the potential to graduate.
    • Richard Cyert, cited in: National Academies (1979), Building the Multiplier Effect: Summary of a National Symposium, September 14-16, 1978. p. 9
  • After two years of study, I'm happy to tell you that dire projections about declines in the U.S. work force due to technological change are exaggerated at best.
    • Richard Cyert, cited in: Data Center's Plant Shutdowns Monitor. (1987), p. 4

A behavioral theory of the firm, 1959


Richard M. Cyert and James G. March. A behavioral theory of the firm. Englewood Cliffs, NJ. 1959, 1963.

  • We believe that, in order to understand contemporary economic decision making, we need to supplement the study of market factors with an examination of the internal operation of the firm – to study the effects of organizational structure and conventional practice on the developments of goals, the formation of expectations, and the execution of choices.
    • p. 1
  • Relatively unsuccessful firms would be more likely to innovate than relatively successful firms.
    • p. 188
  • In general, success tends to breed slack. One of the main consequences of slack is a muting of problems of resource scarcity. Slack provides a source of funds for innovations that would not be approved in the case of scarcity but that have strong subgroup support.
    • p. 189; cited in: Pitelis, C. "A Note on Cyert and March (1963) and Penrose (1959): A Case for Synergy," at, 2006.
  • Rational actors are significantly constrained by limitations of information and calculation.
    • p. 214
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