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The Evolution of Organizational Conventions and Gains from Diversity

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  • Aoki, Masahiko

Abstract

This paper investigates, by using a highly abstract evolutionary game model, the mechanism of evolution of different organizational conventions, as well as roles of free trade, integration, experiments, emulation and entrepreneurial foresight for exploring gains from organizational diversity. It focuses on an aspect of organization as a voluntary association of economic agents trying to overcome the bounds of their rationality, scope of action and competence, rather than as an 'instrument' for entrepreneurial maximizing behavior, and identifies two generic forms of organization as an information system. The paper concludes by discussing the relevance of the evolutionary game model for understanding actual organizational evolutionary processes in North America and Japan. Copyright 1998 by Oxford University Press.

Suggested Citation

  • Aoki, Masahiko, 1998. "The Evolution of Organizational Conventions and Gains from Diversity," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(3), pages 399-431, September.
    • Handle: RePEc:oup:indcch:v:7:y:1998:i:3:p:399-431
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    1. Okazaki, Tetsuji & Masahiro Okuno-Fujiwara, 1997. "Evolution of Economic Systems: The Case of Japan," CIRJE F-Series 97-F-18, CIRJE, Faculty of Economics, University of Tokyo.
    2. Arthur T. Denzau & Douglass C. North, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31, February.
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    4. Eric Maskin & Yingyi Qian & Chengagn Xu, 1997. "Incentives, Scale Economies and Organizational Form," Harvard Institute of Economic Research Working Papers 1801, Harvard - Institute of Economic Research.
    5. Fudenberg, D. & Harris, C., 1992. "Evolutionary dynamics with aggregate shocks," Journal of Economic Theory, Elsevier, vol. 57(2), pages 420-441, August.
    6. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
    7. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, November.
    8. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58, Edward Elgar Publishing.
    9. Itoh, Hideshi, 1987. "Information processing capacities of the firm," Journal of the Japanese and International Economies, Elsevier, vol. 1(3), pages 299-326, September.
    10. Kiminori Matsuyama, 1991. "Increasing Returns, Industrialization, and Indeterminacy of Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 617-650.
    11. Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58(3), pages 211-211.
    12. Aoki Masahiko, 1995. "An Evolving Diversity of Organizational Mode and Its Implications for Transitional Economies," Journal of the Japanese and International Economies, Elsevier, vol. 9(4), pages 330-353, December.
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    Cited by:

    1. Landini, Fabio, 2012. "Technology, property rights and organizational diversity in the software industry," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 137-150.

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