Fabio Arcangeli, Paul David, Frank Engelman, Christopher Freeman, Massimo Moggi, Richard Nelson, Luigi Orsenigo, Nathan Rosenberg, Michele Salvati, G. N. von Tunzelman, two anonymous referees, and the participants at the meeting of the Committee on Distribution, Growth, and Technical Progress of the Italian National Research Council (CNR), Rome, November 16, 1985, have helped with various redraftings. A particularly grateful acknowledgment is for the insightful and patient help of Moses Abramovitz. This work has been undertaken at the Science Policy Research Unit (SPRU), University of Sussex, as part of the research program of the Designated Research Centre, sponsored by the Economic and Social Research Council (ESRC). Earlier support to the research that led to this paper by the Italian National Research Council (CNR) is also gratefully acknowledged. The statistical research has been undertaken with the assistance of Stephano Brioschi, Ilaria Fornari, and Giovannu Prennushi.

https://www.jstor.org/stable/info/2726526

Sources, Procedures, and Microeconomic Effects of Innovation

The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

This edited collection applies the network approach to the analysis of business relationships in a global context. Drawing on a number of international case studies, a "network approach" is developed, giving rise to theoretical and practical managerial insights and a different way of conceptualizing companies within markets. New angles emerge on traditional problems of business management, with some novel implications which should challenge established ways to analyze business markets. Previous publications by these authors include, "Corporate Technological Behaviour", "Professional Purchasing" and "Managing Innovation Within Networks".

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Developing relationships in business networks

Today, as in the past, within a country at a given time those with higher incomes are, on average, happier. However, raising the incomes of all does not increase the happiness of all. This is because the material norms on which judgments of well-being are based increase in the same proportion as the actual income of the society. These conclusions are suggested by data on reported happiness, material norms, and income collected in surveys in a number of countries over the past half century.

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Will raising the incomes of all increase the happiness of all

Material aspirations are initially fairly similar among income groups; consequently more income brings greater happiness. Over the life cycle, however, aspirations grow along with income, and undercut the favourable effect of income growth on happiness, although the cross-sectional happiness-income difference persists. People think they were less happy in the past and will be happier in the future, because they project current aspirations to be the same throughout the life cycle, while income grows. But since aspirations actually grow along with income, experienced happiness is systematically different from projected happiness. Consequently, choices turn out to be based on false expectations.

Income and Happiness: Towards a Unified Theory

Results from empirical studies of firm behavior are synthesized into a theory of the firm as a competent team. I demonstrate the existence of a tacit organizational competence exercising a leverage on the productivities of all other factors through selecting and allocating competent people, thus earning a monopoly rent in the capital market. The competence identified can only be fairly compensated through sharing in firm value growth in the equity market, exhibiting undervaluation of prime assets. Policies aimed at firm efficiency should improve the market measurement function, including stimulating insiders to exhibit information through trades.

The firm as a competent team

This chapter takes on three tasks: (1) to survey the study of economic competence as it appears in economic literature; (2) to give a meaningful and operational definition of economic competence as one of the factors contributing to macroeconomic growth; and (3) to suggest a methodology — pursued in greater depth elsewhere — to generalize and link economic competence, as defined at the micro (firm, individual) level, to macroeconomic growth through simulation on the micro-based macroeconomic Model of the Swedish Economic System (MOSES). By introducing knowledge in the micro setting of firm organizational competence, we arrive at a very different interpretation measured at the macro industry level from that of standard neoclassical theory.

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The Nature and Importance of Economic Competence

The Swedish micro-to-macro model, MOSES, is used to show how complex economic behavior emerges from interacting, boundedly rational agents. The simulation model has been calibrated using business firm data. Non-linearities arise in its specification of technology, the distribution of firm characteristics and in the rules that govern entry and exit. The model economy is characterized by a restless competitive growth process that is normally robust, but that now and then generates phases of local disorderly behavior including - for some parameter settings - the collapse of entire sectors. The model explains why government agents have difficulty predicting the reactions of the economy to policies, suggesting that government treads cautiously in order not to do more harm than good.

Modeling the experimentally organized economy: Complex dynamics in an empirical micro-macro model of endogenous economic growth

Working Paper No. 256 is published as "The Knowledge Based Information Economy" (authors: Gunnar Eliasson, Stefan Folster, Thomas Lindberg, Tomas Pousette and Erol Taymaz). Stockholm: Industrial Institute for Economic and Social Research and Telecon, 1990.

The Knowledge Based Information Economy

Economic growth can be described at the macro level, but it can never be explained at that level. Economic growth is a matter of experimental creation of a variety of technologies that are confronted with potential buyers (customers) in dynamic markets and hierarchies. Thus, economic growth results from the interaction of a variety of actors who create and use technology, and demanding customers. Economic growth is inherently a micro phenomenon. The focus of this paper is on the conditions that are conducive to creation of a variety of new technologies and on those that are necessary and sufficient for the efficient selection and capturing of winners. We refer to the former as a technological system and the latter as a competence bloc, combined with an experimentally organized economy (EOE). The confrontation between actors and between actors and ideas in the markets for innovation gives rise to what we call industrial dynamics. By specifying the mechanisms that generate new technology (rather than assumi...

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Gunnar Eliasson

Papers

The firm as a competent team

The Nature and Importance of Economic Competence

Modeling the experimentally organized economy: Complex dynamics in an empirical micro-macro model of endogenous economic growth

The Knowledge Based Information Economy

Industrial Dynamics and Endogenous Growth