Firms, Incomplete Contracts and Organizational Learning

This explorative paper argues that the central problem of economic organization is adaptation to unforeseen contingencies. However, flexibility is a rather neglected issue in the theory of economic organization. This contrasts with much organization theory, in which the seeking and processing of information about the organization's key uncertainties is seen as a determinant of organizational form. The notion of incomplete contracts is argued to provide a means to bridging ideas from organizational economics and organization theory, particularly organizational learning. Incomplete contracts are not only important because they provide room for incentive problems, but more importantly because they allow firms to exploit processes of organizational learning that must always involve some unforeseen contingencies. Firms are seen as efficient institutional responses to learning processes that involve strongly complementary problem-solving activities.The theory of economic organization, incomplete firm contracts, organizational learning, t

Network-constrained models of liberalized electricity markets: the devil is in the details

Numerical models for electricity markets are frequently used to inform and support decisions. How robust are the results? Three research groups used the same, realistic data set for generators, demand and transmission network as input for their numerical models. The results coincide when predicting competitive market results. In the strategic case in which large generators can exercise market power, the predicted prices differed significantly. The results are highly sensitive to assumptions about market design, timing of the market and assumptions about constraints on the rationality of generators. Given the same assumptions the results coincide. We provide a checklist for users to understand the implications of different modelling assumptions

Network-constrained models of liberalized electricity markets: the devil is in the details

Numerical models for electricity markets are frequently used to inform and support decisions. How robust are the results? Three research groups used the same, realistic data set for generators, demand and transmission network as input for their numerical models. The results coincide when predicting competitive market results. In the strategic case in which large generators can exercise market power, the predicted prices differed significantly. The results are highly sensitive to assumptions about market design, timing of the market and assumptions about constraints on the rationality of generators. Given the same assumptions the results coincide. We provide a checklist for users to understand the implications of different modelling assumptions.Market power, Electricity, Networks, Numeric models, Model comparison

Complementarity constraints and induced innovation: Some evidence from the first IT regime

Technological search is often depicted to be random. This paper takes a different view and analyses how innovative recombinant search is triggered, how it is done and what initial conditions influence the final design of technological artefacts. We argue that complementarities (non-separabilities) play an important role as focusing devices guiding the search for new combinations. Our analysis takes the perspective of technology adopters and not that of inventors or innovators of new products. We illustrate the process of decomposition and re-composition under the presence of binding complementarity constraints with a historical case study on the establishment of the First IT Regime at the turn of the 19th century.Technological regimes, systemic innovation, adoption of technologies, complexity,information technology 1870-1930

Investigating alternative governance systems for the South African mohair supply chain

Mohair is an exclusive natural animal fibre with niche market appeal. It is, however, questionable whether it is inherently suited to a commodity-based marketing system in a marketing environment that requires marketing systems to convey far more information than commodity-based systems do. Historically, mohair has been considered a commodity and the marketing system for mohair has been structured accordingly. It is, however, argued that, the exchange between mohair growers and the buyers of greasy mohair requires increased levels of coordination to govern the exchange in a transaction costs efficient manner. The inefficiencies created by an inappropriate or incomplete marketing system for South African mohair are expected to lead to a loss of consumer value and a loss of potential profit throughout the mohair supply chain if a more coordinated governance structure is not implemented to curb these costs and augment the current spot market exchange.Mohair, marketing, governance structure, supply chain,

Examining resource based view against transactional costs Approach in the french poultry industry : treading upon eggs..

France; Intégration verticale; Coûts de la transaction; French Poultry Industry; Aviculture;

Farmers' behavior and the provision of public goods: towards an analytical framework

The new CAP reform aims to stimulate the role of agriculture as provider of public goods. An analytical framework is developed to model farmers’ decision making and to gain insight into farmers’ behavior in response to a number of policy instruments. The framework integrates characteristics of farm, farmer, market, as well as the policy instruments. Theoretical analysis suggests that attitudes, off-farm employment opportunities, non-pecuniary benefits and expectations of future developments can play important roles in farmer’s decision making regarding the provision of public goods. Empirical research is needed to test the hypothesis

Complementarity constraints and induced innovation: some evidence from the First IT Regime

Technological search is often depicted to be random. This paper takes a different view and analyses how innovative recombinant search is triggered, how it is done and what initial conditions influence the final design of technological artefacts. We argue that complementarities (non-separabilities) play an important role as focusing devices guiding the search for new combinations. Our analysis takes the perspective of technology adopters and not that of inventors or innovators of new products. We illustrate the process of decomposition and re-composition under the presence of binding complementarity constraints with a historical case study on the establishment of the First IT Regime at the turn of the 19th century.research and development ;