https://www.sfu.ca/~wainwrig/Econ400/jensen-meckling.pdf

Theory of the firm: Managerial behavior, agency costs and ownership structure

Firm Resources and Sustained Competitive Advantage

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

/pdf/the-iron-cage-revisited-institutional-isomorphism-and-xas5qn5nhy.pdf

The iron cage revisited institutional isomorphism and collective rationality in organizational fields

In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

/pdf/social-capital-in-the-creation-of-human-capital-1836wo2872.pdf

Social Capital in the Creation of Human Capital

In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **

/pdf/absorptive-capacity-a-new-perspective-on-learning-and-1n1c9gg9x0.pdf

Absorptive capacity: a new perspective on learning and innovation

Commentary: Williamson on Predatory Pricing II

Models of synaptic plasticity have been used to better understand neural development as well as learning and memory. One prominent classic model is the Bienenstock-Cooper-Munro (BCM) model that has been particularly successful in explaining plasticity of the visual cortex. Here, in an effort to include more biophysical detail in the BCM model, we incorporate 1) feedforward inhibition, and 2) the experimental observation that large synapses are relatively harder to potentiate than weak ones, while synaptic depression is proportional to the synaptic strength. These modifications change the outcome of unsupervised plasticity under the BCM model. The amount of feed-forward inhibition adds a parameter to BCM that turns out to determine the strength of competition. In the limit of strong inhibition the learning outcome is identical to standard BCM and the neuron becomes selective to one stimulus only (winner-take-all). For smaller values of inhibition, competition is weaker and the receptive fields are less selective. However, both BCM variants can yield realistic receptive fields. 

/pdf/weight-dependence-in-bcm-leads-to-adjustable-synaptic-12uu9z20.pdf

Weight dependence in BCM leads to adjustable synaptic competition

Martin Weitzman has written a serious book about the chronic problem of stagflation that has plagued the United States economy for the past twenty years. As discussed below, I have grave reservations both about the underlying microeconomic model on which Weitzman relies and about the basic policy proposal that he advances. Neither, in my judgment, is sufficiently microanalytic to come to terms with the fundamentals of contracting in the labor market-the key market in Weitzman's analysis of stagflation. Of books that work within the firm-as-production-function tradition,' however, Weitzman's treatment of stagflation is the best of its kind. It has justifiably attracted wide attention and received high praise. Weitzman traces the macroeconomic problem of stagflation to a microeconomic flaw in the private sector of the economy-the fixed-wage labor contract. Because firms and labor strike wage bargains of a fixed rather than variable wage kind, variations in demand for a firm's product give rise to a fluctuating level of employment (at a fixed wage), rather than a stable level of employment (at an adjusted wage). Weitzman maintains that shifting from a fixed to a variable wage system-where \"a worker's compensation is directly and automatically adjusted by some index of the firm's well-being,\" such as product price, revenue per worker,

/pdf/a-microanalytic-assessment-of-the-share-economy-4ibwpr17r8.pdf

A Microanalytic Assessment of "The Share Economy"

Inasmuch as “all theories, not just the neoclassical, start with the existence of firms” (Arrow 1999, vi), since the theory of the firm figures prominently in both Milton Friedman's essay on “The methodology of positive economics” (F53) and my own research agenda, and since we are all closet methodologists, I responded with alacrity to the invitation to prepare a paper on F53 as it relates to the theory of the firm. My remarks are organized in four parts. I begin with what I take to be the main message of the essay: most economists are and should be engaged in the study of positive economics. What I regard as overreaching parts of the essay are discussed in section 2. Post-1953 developments in the theory of the firm are sketched in section 3. Concluding remarks follow. The main message The first ten pages of the F53 contain the main message. Specifically, the task of positive economics “is to provide a system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances. Its performance is to be judged by the precision, scope, and conformity with experience of the predictions it yields” (F53, 4). Additionally, simplicity and fruitfulness are important criteria in evaluating alternative theories (F53, 10). As Friedman subsequently remarks, “Most phenomena are driven by a very few central forces. What a good theory does is to simplify, it pulls out the central forces and gets rid of the rest” (Snowdon and Vane 1997, 196).

Oliver E. Williamson

Papers

Commentary: Williamson on Predatory Pricing II

Weight dependence in BCM leads to adjustable synaptic competition

A Microanalytic Assessment of "The Share Economy"

Friedman (1953) and the theory of the firm

Capítulo 2 – Por que Direito, Economia e Organizações?