A critical survey of J. K. Arrow'S theory of knowledge
In my critical review of Arrow's theory of information, I show that despite its great achievements, this theory lacks the tacit, institutionalized, unexpected and non-rational dimensions of knowledge. The organizational or corporate culture cannot be derived from market failure or market imperfection. It is the direct outcome of internal organization of firm and other social networks, and thus closely related to learned and transmitted knowledge in a group context. Hence knowledge does not simply reflect the limits of market (as suggested by Arrow, 1974), and the presence of parametrical uncertainty, it implies the power of organization and networks in the face of radical uncertainty.
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|Date of revision:||1997|
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- Arthur T. Denzau & Douglass C. North, 1993.
"Shared Mental Models: Ideologies and Institutions,"
- Arrow, Kenneth J, 1991. "Scale Returns in Communication and Elite Control of Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 1-6, Special I.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-71, September.
- North, Douglass C, 1994.
"Economic Performance through Time,"
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American Economic Association, vol. 84(3), pages 359-68, June.
- Langlois, Richard N., 1983. "Internal Organization In a Dynamic Context: Some Theoretical Considerations," Working Papers 83-04, C.V. Starr Center for Applied Economics, New York University.
- Nelson, Richard R & Winter, Sidney G, 1980. "Firm and Industry Response to Changed Market Conditions: An Evolutionary Approach," Economic Inquiry, Western Economic Association International, vol. 18(2), pages 179-202, April.
- Arrow, Kenneth J, 1969. "Classificatory Notes on the Production and Transmission of Technological Knowledge," American Economic Review, American Economic Association, vol. 59(2), pages 29-35, May.
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