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Stability, specialization and social recognition

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Author Info
Gilles, Robert P.
Lazarova, Emiliya A.
Ruys, Pieter H.M. (Tilburg University, Center for Economic Research)
Abstract

Yang s theory of economic specialization under increasing returns to scale (Yang 2001) is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory specialization and, thus, the social division of labor is firmly embedded within a system of perfectly competitive markets. This leaves unresolved whether and how such development processes are possible in economies based on more primitive, nonmarket organizations. In this paper we introduce a general relational model of economic interaction. Within this non-market environment we discuss the emergence of economic specialization and ultimately of economic trade and a social division of labor. We base our approach on three stages in organizational development: the presence of a stable relational structure; the presence of relational trust and subjective specialization; and, finally, the emergence of objective specialization through the social recognition of subjectively defined economic roles

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 17.

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Date of creation: 2006
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Handle: RePEc:dgr:kubcen:200617

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Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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  1. Robert P. Gilles & Emiliya Lazarova & Pieter H.M. Ruys, 2006. "On Socio-economic Roles and Specialization," Tinbergen Institute Discussion Papers 06-035/2, Tinbergen Institute. [Downloadable!]
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