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Working Papers

To obtain a copy of a working paper, e-mail the author by clicking on his or her name.  If you want your working paper to be posted, send information on the author(s), title, keywords, and an abstract to the editor.  For other relevant working paper series around the world, click here.




WP 03-2

Giovanni Gavetti  (2003). Evolutionary Theory Revisited: Cognition, Hierarchy, and Capabilities.


Keywords: Firm Capabilities, Cognition, Simulation Methodology .


Abstract: Building on a field study of Polaroid’s transition from analog to digital imaging, this article identifies important lacunae in evolutionary research on capabilities. It argues that this research has focused excessively on the emergent, quasi-automatic nature of capability development, thus neglecting the role of cognition and deliberation. Furthermore, because it conceives capabilities as developing "from below," this view grants no role, or a very restricted role, to influence from the top and therefore underplays the role of organizational hierarchy in capability development. This paper begins to fill these twin gaps. The field study grounds the development of an agent-based simulation model that focuses on processes of cognition and experiential learning at different levels of an organizational hierarchy. The model shows how these processes differ by hierarchical level, how they interact, and how corporate executives can influence these interactions. This conceptual apparatus allows me to build theory at two levels. On the one hand, I delineate the traits of a micro-foundation for research on capabilities that addresses these lacunae. On the other hand, I shed light on the role of corporate executives in the development of capabilities and, more broadly, in strategic decision-making. 

WP 03-1

Johann Peter Murmann  (2003). The Coevolution of Industries and Academic Disciplines. 


Keywords: Coevolution, Industry Analysis, Development of Science.


Abstract:  Based on a five-country historical case study of the synthetic dye industry and the discipline of chemistry, the paper argues that academic disciplines, like industries, change through variation, selection, and retention processes. Using a comparative historical method and drawing on inductive evidence spanning a 60-year period, the study clarifies how national industries and academic disciplines coevolve as a result of mutualistic causal processes that work alongside well-known competitive processes. The analysis identifies three causal processes as being responsible for the coevolution of national industries and national academic disciplines: the exchange of personnel between industrial firms and academic organizations, the formation of commercial ties between the two social arenas, and lobbying by each on the other’s behalf. In both social arenas, the exchange of personnel affects the variation, selection, and retention processes, whereas the formation of commercial ties affects only the variation and selection processes, and lobbying affects only the selection processes.


WP 02-5

Jan Fagerberg (2002). A Layman's Guide to Evolutionary Economics


Keywords: Evolution, Schumpeter, Innovation, Growth Theory.


Abstract: During the last decades we have seen a revival of interest in the works of Joseph Schumpeter and "evolutionary" ideas in economics more generally. This paper presents an overview and interpretation of these developments. Following an introductory discussion of the concepts and ideas (and their origins) the main characteristics of Schumpeter’s own contribution are presented. On this basis we make an assessment of the more recent contributions in this area, the (mostly applied) "neo-schumpeterian" literature that attempts to use Schumpeterian concepts to empirically analyse real world phenomena, and the more formal "evolutionary modelling" literature associated with the names of Sidney Winter and Richard Nelson. Finally we raise the question of how much the different contributions considered in the paper actually have in common (is there a common core?), and what the differences and similarities are when compared to other approaches (particularly the so-called "new growth theory"). You can download this paper here. 

WP 02-4

William P. Barnett and David McKendrick (2002). The Organizational Evolution of Global Technological Competition


Abstract: Various industries are marked by rapid technological change and increasingly global competition.  We explain how such developments provide a context for “Red Queen” competition, where organizational learning and competition accelerate each other over time.  Arguing that competition stimulates organizational development, we predict that organizations experiencing a history of competition are less likely to fail.  This implies that a strategy of technological differentiation generates short-run survival advantages, but backfires over time as isolated organizations suffer from increasing rates of failure.  Also, we argue that the Red Queen magnifies differences in competitiveness among organizations due to underlying differences in their propensities to learn, so that technologically leading organizations are especially strong competitors.  This strength, paradoxically, makes technological leadership a hazardous strategy because technological leaders must compete against stronger rivals.  We find support for these conjectures in a study of the worldwide hard disk drive market, estimating organizational ecology models that allow for increasing global competition over time and that help to explain national differences in organizational survival rates. You can download this paper here. 


WP 02-3

Tony Fu-Lai Yu, (2002). An Entrepreneurial Perspective of Institutional Change.


Keywords: Entrepreneurial discovery, Institutions, Coordination, Learning.

Abstract: Utilizing Kirzner’s theory of entrepreneurial discovery, Schumpeter’s two types of economic responses and the Austrian theory of institutions as building blocks, this paper constructs an entrepreneurial theory of institutional change. Focusing on the coordinating role of human institutions, this paper argues that entrepreneurial extraordinary discovery destroys the stability of institutions and creates uncertainty in the market (creative response). As a result, institutions are incapable of coordinating economic activities because market participants’ stocks of knowledge are no longer adequate to solve new problems. Hence, profit gaps or mismatches of market participants’ plans occur. Given new technologies, new relative prices and tastes, imitative entrepreneurs soon identify and capitalize on the opportunities created by Schumpeterian extraordinary discoveries (adaptive response). Imitators improve production methods, modify rules and alter property rights in order to improve coordination. Through learning, experimentation, trial and error, the more rewarding methods are then selected. Successful actions are imitated and repeated in the market, and gradually crystallized into new institutions which once again serve as social coordinators.


WP 02-2

Richard N. Langlois (2002). The Vanishing Hand: the Changing Dynamics of Industrial Capitalism.


Key words: Industrial Organization, Markets, Managerial Hierarchies


Abstract: In a series of classic works, Alfred Chandler challenged the prediction (implicit perhaps in Adam Smith’s account of the division of labor and the Invisible Hand) that economic growth would always lead to finer market decentralization. In the late nineteenth and early twentieth centuries, Chandler showed, the visible hand of managerial coordination replaced the invisible hand of the market. Many would argue, however, that the late twentieth century witnessed an organizational revolution at least as important as the one Chandler described. In that epoch, Smithian forces clearly outpaced Chandlerian ones. This paper is a preliminary attempt to explain why: to provide some theoretical insight into the organizational structure of the new economy. The basic argument - the vanishing-hand hypothesis - is this. The managerial revolution Chandler chronicled was the result of an imbalance between the coordination needs of high-throughput technologies and the abilities of contemporary markets and contemporary technologies of coordination to meet those needs. With further growth in the extent of the market and improvements in the technology of coordination, the central management of vertically integrated production stages is increasingly succumbing to the forces of decentralization. You can read the paper here. 




WP 02-1 

William P. Barnett and Olaf Sorenson (2002). The Red Queen in Organizational Creation and Development.


Key words: Organizational Learning, Red Queen Evolution, Industry Analysis


Abstract: We synthesize organization learning theory and organizational ecology to predict systematic patterns in the founding and growth of organizations over time.  Our central argument is that competition triggers organizational learning, which in turn intensifies competition that again triggers an adaptive response.  We model this self-exciting dynamic – sometimes referred to as the “Red Queen” in general evolutionary theory – to explain organizational founding and growth rates among the thousands of retail banks that have operated in Illinois at any time from 1900-1993.  We find strong evidence that Red Queen evolution led some organizations to grow quickly and to place strong competitive pressure on rivals.  Red Queen evolution also helped establish barriers to entry.  However, this same evolutionary process appears to make organizations more susceptible to “competency traps,” ultimately slowing their growth rates and inviting new market entry.  Organizations confronted by a widely varying distribution of competitors, by contrast, grow more slowly and more likely face new entrants.  Overall, the results suggest that processes of organizational creation and growth emerge from ecologies of learning organizations.  More generally, we discuss the use of ecological theory and models to study the empirical consequences of organizational learning. You can download this paper here. 

WP 01-5

Roderick Wallace (2001). Draft of "Selection Pressure and Organizational Cognition: Implications for the Social Determinants of Health."


Keywords: Evolutionary punctuation, Health, Inequality, Information theory, Phase transition, Social networks.


Abstract: We model the effects of Schumpeterian ‘selection pressures’ – in particular Apartheid and the neoliberal ‘market economy’ – on organizational cognition in minority communities, given the special role of culture in human biology. Our focus is on the dual-function social net-works by which culture is imposed and maintained on individuals and by which immediate patterns of opportunity and threat are recognized and given response. A mathematical model based on recent advances in complexity theory displays a joint cross-scale linkage of social, individual central nervous system, and immune cognition with external selection pressure through mixed and synergistic punctuated ‘learning plateaus.’ This provides a natural mechanism for addressing the social determinants of health at the individual level. The implications of the model, particularly the predictions of synergistic punctuation, appear to be empirically testable.  You can download the pdf file here.



WP O1-4

Johann Peter Murmann  (2001). Introductory Chapter to "Knowledge and Competitive Advantage: The Coevolution of Firms, Technology, and National Institutions in the Synthetic Dye Industry, 1850-1914."

Competitive Advantage, Coevolution, Industry Analysis

This study argues that the creation of productive capabilities underlying successful firms and the institutional context surrounding firms are related through interactive, coevolutionary processes. To induce a dynamic framework for analyzing the sources of competitive advantage, I examine the processes through which German firms became dramatically more successful than their British and American counterparts in the synthetic dye industry. I specifically examine how the fortunes of synthetic dye firms have been influenced by differences in the educational systems and patent laws. I find that firms are in part successful because they develop collective strategies to mold the institutional context in their favor. You can download the paper as a pdf file here.  


WP 01-3

Richard R. Nelson  (2001). On the Complexities and Limits of Market Organization.


Keywords: Economic Organization, Economic Change

The close of the twentieth century saw a virtual canonization of simple market organization as the best, indeed the only really effective, way to organize and govern economic activity. This essay is not to gainsay the present conventional wisdom, but to try to civilize it and nudge it to be more nuanced and subtle. The present canonization is a real problem. The United States and other advanced industrial nations presently are facing a number of challenging and often contentious issues regarding how to organize and govern a variety of activities that employ a large and growing fraction of their resources. While for some of these simple market organization may be a satisfactory answer, for many it will not. This essay aims to illuminate the issues, and explores where markets work reasonably well, where markets need to be supplemented by a variety of non market mechanisms to provide a satisfactory governance structure, and where central reliance probably needs to be placed in non market structures.



WP 01-2

Howard E. Aldrich and Martha Argelia Martinez (2001). Many are Called, but Few are Chosen: An Evolutionary Perspective for the Study of Entrepreneurship.

Keywords: Entrepreneurship, Networks, Taxonomy of Environmental Forces

Abstract: More than a decade ago, Low and MacMillan identified three elements indispensable to an understanding of entrepreneurial success: process, context, and outcomes.  Since their critique, three important advances include  (a) a shift in theoretical emphasis from the characteristics of entrepreneurs as individuals to the consequences of their actions,  (b) a deeper understanding of how entrepreneurs use knowledge, networks, and resources to construct firms, and (c) a more sophisticated taxonomy of environmental forces at different levels of analysis (population, community, and society) that affect entrepreneurship.  Although our knowledge of entrepreneurial activities has increased dramatically, we still have much to learn about how process and context interact to shape the outcome of entrepreneurial efforts.  From an evolutionary approach, process and context (strategy and environment) interact in a recursive continuous process, driving the fate of entrepreneurial efforts.  Thus, integrating context and process into research designs remains a major challenge.  Such integration constitutes a necessary step to a more complete evolutionary approach and a better understanding of entrepreneurial success.



WP 01-1
Bruce Fetter (2001). Genes, Memes, and Contingency: The Effects of Purposive Action in Mortality Reduction.

Keywords: Memes, Human Mortality, Health Care, Long-term Social Change

Abstract: The term "meme" was coined by the biologist Richard Dawkins in 1976 to explain how the transmission of ideas in human society differs from that of genetic materials in living organisms. Although genes and memes both reproduce themselves through imitation, memes can transmit acquired characteristics, allowing them to change quickly. Clusters of ideas which promote longer life can be seen as health care memeplexes. Over the last 2500 years, these memeplexes have been transmitted through four social groups: families, healers, religious organizations and governments. In the last two centuries, economic considerations have played an increasing role in the implementation of health care memeplexes.

WP 00-5
Maurizzio Zollo and Sidney G. Winter (2000).  From Organizational Routines to Dynamic Capabilities.

Keywords: Organizational Capabilities, Knowledge-based Theories of the Firm, Knowledge Codification.

Abstract: This paper investigates the mechanisms through which organizations develop capabilities in a dynamic sense (Teece, Pisano & Shuen, 1997) and reflects upon the role of (1) experience accumulation, (2) knowledge articulation and (3) knowledge codification processes in creating and constantly reshaping organizational routines.  The argument is made that dynamic capabilities originate from the co-evolution of these three mechanisms.  At any point in time firms adopt a mix of learning behaviors constituted by a semi-automatic accumulation of experience and by increasingly deliberate investments in knowledge articulation and codification activities.  Further, the relative effectiveness of these capability-building mechanisms is analyzed here in their interaction with selected features of the task to be learned, such as its frequency, homogeneity and degree of causal ambiguity.  Testable hypotheses are developed in the context of a theoretical model of dynamic capability building, and some preliminary empirical evidence in support of the arguments made is reviewed.  Finally, implications of the analysis for evolutionary economics and for the emerging knowledge-based view of the firms are discussed and an agenda for future research efforts on these issues is advanced.

WP 00-4

Richard Nelson and Bhaven Sampat (2000).  Making Sense of Institutions as a Factor Shaping Economic Performance.

Keywords: Methodology and History of Economic Thought, Economic Development, Industrial Organization.

Abstract: There has been a resurgence of interest in how institutions affect economic performance. A review of this literature reveals that the concept of an "institution" means different  things to different scholars, both within economics and across the social sciences. We discuss what factors unify the different definitions of institutions, and develop a concept of institutions useful for the analysis of economic performance, and economic growth in particular. Specifically, we develop the notion of institutions as standard "social technologies." Economic growth results from the co-evolution physical and social technologies. The article is now published in the Journal of Economic Behavior & Organization, Vol. 44 (2001) 31-54.
Download pdf file from the authors web or the JEBO web.

WP 00-3

Louis Galambos and Jeffrey Sturchio (2000).  Science, Executive Leadership, and Business: The Multinational Gives Way to the Global Firm in Pharmaceuticals

Keywords: Industry evolution, top management teams, globalization

Abstract: The authors conclude that in pharmaceuticals the MNE, which operates through susidiaries in a number of nations but is controlled by nationals from the headquarters country, is starting to give way to a new form of global enterprise which draws its executives as well as its employees from a wide variety of national cultures, educational systems, and business settings.  R&D and in some cases R&D leadership are internationalized.  Using a prosopographical methodology, they develop data that is consistent with the theory of evolutionary economics, which suggests that greater diversity will conduce to a more successful adaptation to a competitive environment.


WP 00-2

Joel Mokyr (2000). Science, Technology, and Knowledge: What Historians can learn from an evolutionary approach.

Key Words: Technical change, evolution of technology, knowledge typology.

Abstract: This paper puts down the essential elements of a Darwinian model that could be useful in analyzing historical situations of technological change. It argues that, following Nelson and Winter, the unit of analysis should be the technique, that is, a set of instruction on how to manipulate natural regularities for material advantage, that is, produce. It argues that such a model needs to contain three components: a dual setup that consists of an underlying structure and a manifest entity; a dynamic structure in which units in some fashion reproduce and pass on information over time; and a property of superfecundity which necessitates selection, which gives the system direction over time. The dual structure consists of two types of human knowledge: knowledge of the what and why (W-knowledge) and the knowledge of how (l-knowledge) which is set of blueprints and instructions of all techniques. The paper discusses the historical meaning of selection and how evolutionary principles can help us understand historical phenomena even if there are fundamental differences between the evolution of technology and that of living beings.  JPM: This is a very ambitious working paper. Anyone interested in the growth of useful knowledge and social change will find the paper very interesting and thought-provoking.  

WP 00-1

Joel Mokyr (2000). Knowledge, Technology, and Economic Growth During the Industrial Revolution.

Key Words: Evolution of knowledge, economic growth, positive feedback.

Abstract: This paper is an application of evolutionary theory to a concrete historical problem, namely explaining the timing of the Industrial Revolution in the last third of the eighteenth century. The argument is that useful knowledge (that is, knowledge and understanding of natural phenomena and regularities) constrains the form that techniques can take. It defines the central concept of an epistemic base of a technique, which describes how much of the natural forces underlying the functioning of a technique are understood. The paper then argues that despite of the widespread notion that science had little to do with the Industrial Revolution, the rapid changes in the diffusion of and access to useful knowledge as much as scientific breakthroughs, helped make the Industrial Revolution possible. In that way, the scientific revolution and the enlightenment triggered an "information revolution" that helps explain the timing of the Industrial Revolution. This view is reinforced by pointing out that the unique historical event was not just the traditional "wave of gadgets" of the 1760s and 1770s but the fact that these did not peter out in the first decades of the nineteenth century. The technological system in Western Europe, and especially in Britain, shows growing positive feedback and complementarity between techniques and the useful knowledge underlying them leading eventually to a self-reinforcing dynamic system of technological progress.



WP 99-5

Hull, David L., Rodney E. Langman and Sigrid S. Glenn (1999). A General Account of Selection: Biology, Immunology and Behavior.

Key Words: General theory of selection; variation, replication, evolution, selection processes in: operant behavior, operant learning; immunology.

Abstract: Numerous different phenomena seem on the surface to be instances of selection. In this paper, we provide a general account of selection in biological evolution, the response of the immune system to antigens, and operant learning. The three fundamental elements of selection are replication, variation and environmental interaction. However, these elements must be arranged in a very precise way for selection to occur. The net results are changes in more inclusive systems to form lineages. JPM: Anyone working on developing a theory of evolution for a phenomenon that to date has not been formulated as an evolutionary process will find this paper extremely helpful. It makes an important step in developing a general account of selection that can be applied in a variety contexts. 



WP 99-4

Hodgson, Geoffrey. (1999). Darwin, Veblen and the Problem of Causality.

Key Words: Evolutionary Economics, Theories of Causation. History of Evolutionary Ideas in the Social Sciences.

Abstract: This article discusses some of the ways in which Darwinism has influenced a small minority of economists. It is argued that Darwinism involves a philosophical as well as a theoretical doctrine. Despite claims to the contrary, the uses of analogies to Darwinian natural selection theory are highly limited in economics. Exceptions include Thorstein Veblen, Richard Nelson, and Sidney Winter. At the philosophical level, one of the key features of Darwinism is its notion of detailed understanding in terms of chains of cause and effect. This issue is discussed in the context of the problem of causality in social theory. At least in Darwinian terms, the prevailing causal dualism - of intentional and mechanical causality - in the social sciences is found wanting. Once again, Veblen was the first economist to understand the implications for economics of Darwinism at this philosophical level. For Veblen, it was related to his notion of 'cumulative causation.' The article concludes with a discussion of the problems and potential of this Veblenian position. JPM: This is an important article that everyone interested in evolutionary economics and organization theory should read.



WP 99-3

Hodgson, Geoffrey. (1999). Is Social Evolution Lamarckian or Darwinian?

Key Words: Models of Evolution in the Social Sciences.

Abstract: Is social or cultural evolution Lamarckian in some sense? A positive answer to this question may appear to threaten the consistency of the biological with the social sciences. Furthermore, the modern notion of 'Universal Darwinism' might also threaten any Lamarckian conceptions in the social sphere. It is argued in this paper that while theories of social and biological evolution must be consistent with each other, they do not have to be identical. Whether social evolution is Lamarckian depends on whether there is something like the inheritance of acquired characters at the social level. This, in turn, raises the question of the unit of cultural inheritance and replication. Some alternative proposals for such a unit are discussed. The essay concludes that a version of Lamarckism in the social sphere can be consistent with Darwinian principles. As Donald Campbell suggested some time ago, both social and biotic evolution are special cases of more general processes of evolution of complex systems. If this general schema can be described as 'Darwinian' then it is a much more powerful label than 'Lamarckian', which by contrast indicates much less. Other working papers by Hodgson.



WP 99-2

Nelson, Katherine and Richard R. Nelson. (1999). On the Nature and Evolution of Human Know How.

Key Words: Evolution of Knowledge, Cognitive Science, Learning, Knowledge Typology, Growth of Knowledge in Technology and Science

Abstract: The authors explore some connections between bodies of empirical research and theorizing that bear on technological know how and its advance. Observing that scholarship on technological change has virtually not interacted with cognitive science, the authors explore problems, similarities, and opportunities for cross-fertilization in these two arenas of inquiry. The authors see trial-and-error learning in models of cognitive science as congenial to an evolutionary epistemology view of technical change. Noting that technological advance typically is brought about by a community of practitioners, the authors suggest that cognitive science faces the challenge of developing a sophisticated model of shared cognition and problem solving.



WP 99-1

Murmann, Johann Peter and Ernst Homburg (1999). Comparing Evolutionary Dynamics Across Different National Settings: The Case of the Synthetic Dye Industry, 1857-1914

Key Words: Evolutionary Economics, Management and Organization Theory, Industry Evolution, Business History, Cross-national Comparisons, Synthetic Dye Industry

Abstract: Empirical investigations of industry evolution have flourished over the last two decades, but with the exception of Carroll and Hannan's automobile study (1995) no one has examined in systematic fashion whether evolutionary patterns are the same in different social contexts. We present in this paper some striking dissimilarities in patterns of evolution that appear when the unit of analysis is not the entire world, but rather individual countries. These variations in country patterns (we compare Great Britain, France, Germany, U.S.A. and Switzerland) call out for an explanation and raise questions about current models of industry evolution. We identify as causal drivers behind the observed differences in country patterns: The Legal Environment, Availability of Skills, Existing Industrial Infrastructure, Economies of Scale and Scope, Technological Dynamics, and Positive Feedback Mechanisms. The article is now published in the Journal of Evolutionary Economics, Vol. 11 (2001) 177-205.  Download pdf file from the authors web.