(with Kirsten Foss) “Assets, Attributes and Ownership,” International Journal of the Economics of Business 8 (issue 1): 19-37.
The notion of full asset ownership is important in economics, for example, in recent work on the boundaries of the firm. Much of this work has been taken up with the issue why it matters who owns an asset. However, recognizing that assets have multiple attributes, and that these may be subject to capture in a world of positive measurement and enforcement costs, implies that the notion of full asset ownership is problematic. New property rights theorists sidestep these issues by implicitly assuming that residual rights of control are perfectly enforced (i.e. full asset ownership obtains). We discuss the notion of property rights and ownership in a setting characterized by positive costs of enforcement, and suggest that in such a setting, the new property rights model is a part of a more overarching perspective, which also includes older contributions to property rights economics.
”Leadership, Beliefs and Coordination,” Industrial and Corporate Change 10: 357-388.
Although recent economics contributions represent important strides forward in the understanding of leadership behavior, the cognitive and symbolic dimensions of the phenomenon have attracted virtually no interest from economists and game theorists. I argue that an understanding of these dimensions may be founded on coordination games, particularly to the extent that these illustrate interactive belief formation. In this context leadership is defined as the taking of actions that coordinate the complementary actions of many people through the creation of belief conditions that substitute for common knowledge and where these actions characteristically consists of some act of communication directed at those being led. The concept of common knowledge (or its approximation by means of notions of common belief) is argued to be particularly important to understanding leadership. Thus, leaders may establish common knowledge conditions, and assist the coordination of strategies in this way, or make decisions in situations where coordination problems persist in spite of common knowledge.
”Bounded Rationality in the Economics of Organization: Present Use and Future Possibilities,” Journal of Management and Governance 5: 401-425.
The way in which bounded rationality enterscontemporary organizational economicstheorizing is examined. It is argued that,as it is being used, bounded rationalityis not necessary for producing the results of organizationaleconomics. It is at best a rhetorical device,used for the purpose of loosely explainingincomplete contracts. However, it is possibleto incorporate much richer notions of boundedrationality, founded on research in cognitivepsychology, and to illuminate the study ofeconomic organization by means of such notions. A number of examples are provided.
”Simon’s Grand Theme and the Theory of Economic Organization,” Journal of Management and Governance 5: 216-223.
In a series of methodologically oriented papers, Herbert Simon (e.g., 1976, 1978, 1979) tried to convince economists to take his Grand Theme of bounded rationality seriously (henceforth, “BR”). His examples of bounded rationality and theirimplications quite often involved the business firm. Indeed, he sometimes took the notion of “administrative man” to be synonymous with a boundedly rational agent. Of course, Simon himself published prolifically on firms and other organizations (e.g., Simon, 1949, 1951, 1991; March and Simon, 1958). Given all this, it is surprising that – so I shall argue – economists of organizations have made little use of the notion of BR, and that the arguably most successful contemporary economics research that explicitly builds on BR takes place in fields such as behavioral finance and behavioral law and economics. In the following, I argue that BR is, in contrast to the impression often conveyed (e.g., by Augier, Kreiner and March, 2000), not used in an essential way in the modern economics of organization; it is very much a background assumption that is introduced to help explaining other, more central, insights and concepts (e.g., contractual incompleteness and organizational routines).
(with Jens Frøslev Christensen) ”Corporate Coherence: a Market Process Approach,” , Managerial and Decision Economics 22: 213-226.
We address the notion of corporate coherence recently made prominent by Teece et al. (1994. Understanding corporate coherence: theory and evidence. Journal of Economic Behavior and Organization 23 : 1-30). We argue that the literature is confused on the meaning of this notion (and similar notions) along a number of dimensions. Drawing on insights from market-process theories, we propose a dynamic understanding of corporate coherence, an understanding that involves the corporate capacity to strike a favorable balance between the production and exploitation of new knowledge. This argument is elaborated drawing on Austrian economics, evolutionary economics, and post-Marshallian economics.
”Misesian Ownership and Coasian Authority in Hayekian Settings: The Case of the Knowledge Economy,” Quarterly Journal of Austrian Economics 4: 3-24. Spanish version in Libertas 2003.
The present article is taken up with the dynamics of economic organization. In particular, it critically discusses much recent work which has asserted that economic organization—notably, the boundaries of firms, internal organization, and corporate governance—will undergo major transformative changes as a result of the emergence of the so-called “knowledge economy,” a term much fancied by business administration and management scholars (Prusak 1997; Neef 1998). An Austrian perspective is a particularly fitting starting point for such an exercise. Surely, Austrian economists— who have always been occupied with analyzing the discovery, dispersion, and use of knowledge—will not be surprised to learn that we live in a knowledge economy. To Austrians, all economies are, in a broad sense, “knowledge economies.” This calls for clarification of the concept. However, like its (somewhat overlapping, but nonidentical) “new economy” counterpart in economics, the knowledge economy notion covers many different phenomena, 1 and as in the case of the new economy, the evidence for these phenomena is somewhat scant, perhaps contrary to the impression provided by the considerable media (and some academic) hype.