Ignorant Actors in the Resource Rich World of the Knowledge Based Economy - On Rational Management in an Experimentally Organized Economy (EOE)
The internal dynamics of the Experimentally Organized Economy (EOE) force actors to constantly innovate to survive competition from all other actors in the same situation, or from new actors entering the market. Since ignorance of circumstances that may be critical for survival characterize the situation of each actor, business mistakes abound. With tacit knowledge distributed over hierarchies and markets analytical methods of management not only feed management with the wrong information but also mislead management, and especially so when something unusual occurs. The change from a seemingly orderly and plannable market environment to an unpredictable, faster and differently organized New economy over the last few decades has made this dynamic an acute management problem. Advance in economic and management theory to help policy makers and management cope is lagging economic development . The managers of the new, distributed (over the market) production organizations have little to learn from the experience of their predecessors in monolithic hierarchies. Hence, the rate of business mistakes has escalated, jeopardizing the life even of the big companies with ample resources to finance a come back. The business manager in the new economy is being subjected to a genuine Darwinian learning experience in the market. Access to competence blocs of organized tacit knowledge distributed over markets, however, minimizes the economic consequences for the firm and for the economy at large of business mistakes, notably the risk of losing the “winners”. Since creating and identifying winners and carrying them on to industrial scale production is the single most important growth promoting factor, a broad based competence to choose the appropriate management method for the occasion is also the important growth promoting factor. For the policy maker this means helping to organize vertically complete and horizontally varied competence blocs of actors with tacit competencies.
|Date of creation:||24 May 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 08-441 59 00
Fax: 08-441 59 29
Web page: http://www.ratio.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
- Eliasson, Gunnar, 1977. "Competition and Market Processes in a Simulation Model of the Swedish Economy," American Economic Review, American Economic Association, vol. 67(1), pages 277-81, February.
- Detemple, Jerome B & Selden, Larry, 1991. "A General Equilibrium Analysis of Option and Stock Market Interactions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(2), pages 279-303, May.
- Barbara J. Spencer & James A. Brander, 1983.
"International R&D Rivalry and Industrial Strategy,"
NBER Working Papers
1192, National Bureau of Economic Research, Inc.
- Spencer, Barbara J & Brander, James A, 1983. "International R & D Rivalry and Industrial Strategy," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 707-22, October.
- Fourgeaud Claude & Gourieroux Christian & Pradel J, 1984.
"Learning procedure and convergence to rationality,"
CEPREMAP Working Papers (Couverture Orange)
- Fourgeaud, Claude & Gourieroux, Christian & Pradel, Jacqueline, 1986. "Learning Procedures and Convergence to Rationality," Econometrica, Econometric Society, vol. 54(4), pages 845-68, July.
- Eliasson, Gunnar, 1996. "Spillovers, Integrated Production and the Theory of the Firm," Journal of Evolutionary Economics, Springer, vol. 6(2), pages 125-40, May.
- John A. Mathews, 2003. "Competitive dynamics and economic learning: an extended resource-based view," Industrial and Corporate Change, Oxford University Press, vol. 12(1), pages 115-145, February.
- Gunnar Eliasson & Clas Wihlborg, 2003. "On the macroeconomic effects of establishing tradability in weak property rights," Journal of Evolutionary Economics, Springer, vol. 13(5), pages 607-632, December.
- Krugman, Paul, 1983. "New Theories of Trade among Industrial Countries," American Economic Review, American Economic Association, vol. 73(2), pages 343-47, May.
- George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
- Eliasson, Gunnar & Johansson, Dan & Taymaz, Erol, 2005. "Firm Tunrover and the Rate of Macroeconomic Growth - Simulating the Macroeconomic Effects of Schumpeterian Creative Destruction," Ratio Working Papers 66, The Ratio Institute.
- Wallis, Kenneth F, 1980. "Econometric Implications of the Rational Expectations Hypothesis," Econometrica, Econometric Society, vol. 48(1), pages 49-73, January.
- Antonov, Mikhail & Trofimov, Georgi, 1993. "Learning through short-run macroeconomic forecasts in a micro-to-macro model," Journal of Economic Behavior & Organization, Elsevier, vol. 21(2), pages 181-203, June.
When requesting a correction, please mention this item's handle: RePEc:hhs:ratioi:0047. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin Korpi)
If references are entirely missing, you can add them using this form.