(with Tom Elfring) ”Competence Building: Understanding the Role of Internal Venturing and Spin-Offs,” Advances in Applied Business Strategy 6: 97-119 .
(no abstract available)
(with Kirsten Foss) ”Theoretical Isolation in Contract Economics,” , Journal of Economic Methodology 7: 313-339.
We discuss contract theory from a combined Austrian/new institutional view. In the latter view, the world is seen as shot through with ignorance and transaction costs, but, as a tendency, entrepreneurial activity responds to the problems caused by these. All modelling must critically reflect this. This ontological commitment is contrasted to various isolations characteristic of contract theory, specifically the modelling strategy of introducing often ad hoc and unexplained constraints that suppress margins and possibilities of entrepreneurial actions that would be open to real-world decision-makers. We illustrate this by means of, for example, the treatment of asymmetric information under complete contracting and the notion of control rights under incomplete contracting.
(with Kirsten Foss) ”Learning in Firms: Knowledge-Based and Property Rights Perspectives,”, European Journal of Social and Economic Systems 14: 119-142.
Proponents of the knowledge-based approach to the firm argue that organizational economics put all the burden on the allocation of incentives and property rights in the explanation of organizational phenomena, and neglects firm-specific knowledge and processes of learning. We argue that there is no inherent reason why organizational economics should be cut off from treating learning and exploring its organizational implications. More specifically, we demonstrate that it is possible to adopt an approach to learning that is consistent with rational choice methodology and stresses economizing, puts the emphasis on learning as a means of realizing efficiencies, is micro-analytic, and contains implications for economic organization. We concentrate on the role of experimentation as a means of finding solutions to coordination problems in complex production systems (e.g., finding the optimal sequence of activities) and the transaction costs learning-by-experimenting may create. Such transaction costs help determine the existence, boundaries and internal organization of the firm, and has implications for the understanding of competitive advantage.
”The Dangers and Attractions of Eclecticism,” Journal of Macromarketing 20: 65-67.
Shelby Hunt’s A General Theory of Competition: Resources, Competences, Productivity, Economic Growth is an extremely ambitious and challenging work. It attempts to construct a theory of competition, called resource-advantage theory, by collecting insights from diverse perspectives in economics and business administration. However, there is little reflection in the book with respect to how theories should be combined in the concrete, and resource-advantage theory does not seem to lead to results that are not contained in one or more of its constituent theories. Although Hunt’s work suffers from excessive eclecticism, it is an admirable starting point for further research.
”Austrian Economics and Game Theory: An Evaluation and a Stocktaking,” Review of Austrian Economics 13: 41-58.
I discuss the merits and drawbacks of game theory in economics from the perspective of Austrian economics. I begin by arguing that Austrians have neglected game theory at their peril, and then suggest that game theoretic reasoning could be one way of modelling key Austrian insights. However, admittedly some aspects of game theory don''t square easily with Austrian economics. Moreover, a major stumbling block for an Austrian acceptance of game theory may lie in the traditional Austrian resistance to formal methods.