IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/11-001.html
   My bibliography  Save this paper

Organizations under Large Uncertainty: An Analysis of the Fukushima Catastrophe

Author

Listed:
  • Masahiko Aoki

    (Department of Economics and SIEPR, Stanford University)

  • Geoffrey Rothwell

    (Department of Economics and SIEPR, Stanford University)

Abstract

This paper analyzes the impacts of the March 11, 2011, earthquake and tsunami at the Fukushima nuclear power plant in Japan, which were amplified by a failure of coordination across the plant, corporate, industrial, and regulatory levels, resulting in a nuclear catastrophe comparable in cost to Chernobyl. It derives generic lessons for industrial structure and regulatory frame for the electric power industry by identifying the two shortcomings of a horizontal coordination mechanism: instability under large shocks and the lack of defense in depth.The suggested policy response is to harness the power of Òopen-interface-rule-based modularity by creating an independent nuclear safety commission and an independent system operator owning the transmission grid module in Japan. We propose a transitory price mechanism that can restrain price volatility while providing investment incentives.

Suggested Citation

  • Masahiko Aoki & Geoffrey Rothwell, 2011. "Organizations under Large Uncertainty: An Analysis of the Fukushima Catastrophe," Discussion Papers 11-001, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:11-001
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/11-001.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ricardo Alonso & Wouter Dessein & Niko Matouschek, 2008. "When Does Coordination Require Centralization?," American Economic Review, American Economic Association, vol. 98(1), pages 145-179, March.
    2. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530.
    3. Masahiko Aoki, 2013. "Toward an Economic Model of the Japanese Firm," Chapters, in: Comparative Institutional Analysis, chapter 18, pages 315-341, Edward Elgar Publishing.
    4. Rothwell, Geoffrey, 1996. "Organizational Structure and Expected Output at Nuclear Power Plants," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 482-488, August.
    5. Masahiko Aoki & Hirokazu Takizuwa, 2013. "Information, Incentives, and Option Value: The Silicon Valley Model," Chapters, in: Comparative Institutional Analysis, chapter 7, pages 72-104, Edward Elgar Publishing.
    6. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58, Edward Elgar Publishing.
    7. Bushnell, James & Hobbs, Benjamin F. & Wolak, Frank A., 2009. "When It Comes to Demand Response, Is FERC Its Own Worst Enemy?," The Electricity Journal, Elsevier, vol. 22(8), pages 9-18, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masahiko Aoki, 2011. "The Five-Phases of Economic Development and Institutional Evolution in China and Japan," Development Economics Working Papers 23196, East Asian Bureau of Economic Research.
    2. Francesc Trillas Jané, 2016. "Behavioral Regulatory Agencies," Working Papers wpdea1606, Department of Applied Economics at Universitat Autonoma of Barcelona.
    3. Trillas, Francesc, 2013. "The Institutional Architecture of Regulation and Competition: Spains's 2012 Reform," IESE Research Papers D/1067, IESE Business School.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aoki, Masahiko & Rothwell, Geoffrey, 2011. "Coordination Under Uncertain Conditions: An Analysis of the Fukushima Catastrophe," ADBI Working Papers 316, Asian Development Bank Institute.
    2. Aoki, Masahiko & Rothwell, Geoffrey, 2013. "A comparative institutional analysis of the Fukushima nuclear disaster: Lessons and policy implications," Energy Policy, Elsevier, vol. 53(C), pages 240-247.
    3. Storz, Cornelia & Riboldazzi, Federico & John, Moritz, 2015. "Mobility and innovation: A cross-country comparison in the video games industry," Research Policy, Elsevier, vol. 44(1), pages 121-137.
    4. Shuo Liu & Dimitri Migrow, 2019. "Designing organizations in volatile markets," ECON - Working Papers 319, Department of Economics - University of Zurich.
    5. Nathalie Greenan & Emmanuelle Walkowiak, 2005. "Informatique, organisation du travail et interactions sociales," Économie et Statistique, Programme National Persée, vol. 387(1), pages 35-63.
    6. Patrick Plane, 1997. "La privatisation de l'électricité en Côte-d'Ivoire : évaluation et interprétation des premiers résultats," Revue Tiers Monde, Programme National Persée, vol. 38(152), pages 859-878.
    7. Bernard Baudry, 1992. "Contrat, autorité et confiance. La relation de sous-traitance est-elle assimilable à la relation d'emploi ?," Revue Économique, Programme National Persée, vol. 43(5), pages 871-894.
    8. Masayuki Morikawa, 2022. "Work‐from‐home productivity during the COVID‐19 pandemic: Evidence from Japan," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 508-527, April.
    9. Alain Asquin & Emmanuelle Reynaud & Marion Polgé, 2001. "Entrepreneurship: what are the typical capabilities to create competitive resources? A discussion from case studies," Post-Print hal-00379862, HAL.
    10. Stefano Dughera, 2020. "Skills, preferences and rights: evolutionary complementarities in labor organization," Journal of Evolutionary Economics, Springer, vol. 30(3), pages 843-866, July.
    11. Masahiko Aoki, 2011. "The Five-Phases of Economic Development and Institutional Evolution in China and Japan," Development Economics Working Papers 23196, East Asian Bureau of Economic Research.
    12. Marie CORIS & Vincent FRIGANT & Yannick LUNG, 2009. "Organizational change and institutional diversity (In French)," Cahiers du GREThA (2007-2019) 2009-23, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    13. Masahiko Aoki, 2004. "An Organizational Architecture of T-form: Silicon Valley Clustering and its Institutional Coherence (Formerly 03004)," Discussion papers 04003, Research Institute of Economy, Trade and Industry (RIETI).
    14. Breton, Albert, 1995. "Organizational hierarchies and bureaucracies: An integrative essay," European Journal of Political Economy, Elsevier, vol. 11(3), pages 411-440, September.
    15. DUDLEY, Leonard & MOENIUS, Johannes, 2003. "Directed Technical Change and International Trade," Cahiers de recherche 2003-18, Universite de Montreal, Departement de sciences economiques.
    16. Katayama, Hajime & Meagher, Kieron J. & Wait, Andrew, 2018. "Authority and communication in firms," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 315-348.
    17. Gan, Tan & Hu, Ju & Weng, Xi, 2023. "Optimal contingent delegation," Journal of Economic Theory, Elsevier, vol. 208(C).
    18. Metin M. Cosgel & Thomas J. Miceli, 1998. "On Job Rotation," Working papers 1998-02, University of Connecticut, Department of Economics.
    19. Tomer, John F., 1995. "Strategy and structure in the human firm: Beyond hierarchy, toward flexibility and integration," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 24(3), pages 411-431.
    20. D. Gatti, 1997. "Flexible Technology, Unemployment and Effort: The Role of the Organization of the Firm," Working Papers ir97004, International Institute for Applied Systems Analysis.

    More about this item

    Keywords

    horizontal coordination; modularity; nuclear power; regional monopoly; electricity regulation; safety regulation; public ownership; independent system operator;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:11-001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anne Shor (email available below). General contact details of provider: https://edirc.repec.org/data/cestaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.