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The Generative Nature of the Firm

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  • da Rocha Braga, Bruno

Abstract

This paper discusses a meta-theoretical framework that aims to explain all forms of economic coordination using a computational complexity approach. Using a formal model inspired by Generative Grammar Theory, it establishes a demarca-tion criterion between markets and hierarchies (including hybrid forms). The hy-pothesized equivalence between economic coordination structures and linguistic structures makes it possible to explore any sequence of decision-making event outcomes, whether individual actions or social interactions, for patterns of causal relations in a way analogous to sentences in a language. This research concludes that patterns of decision-making events are categories of processes, and that eco-nomic coordination in organizational structures achieve a complexity level that is not possible in free market structures.

Suggested Citation

  • da Rocha Braga, Bruno, 2022. "The Generative Nature of the Firm," MPRA Paper 117007, University Library of Munich, Germany, revised 09 Apr 2023.
    • Handle: RePEc:pra:mprapa:117007
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    File URL: https://mpra.ub.uni-muenchen.de/117007/1/MPRA_paper_117007.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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