2016/38 | LEM Working Paper Series | ||||||||||||||||
Institutions Are neither Autistic Maximizers nor Flocks of Birds: Self-organization, Power, and Learning in Human Organizations |
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Giovanni Dosi, Luigi Marengo and Alessandro Nuvolari |
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Keywords | |||||||||||||||||
Institutions, rationality, self-organization, hierarchies,power, endogenous preferences, motivations
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Abstract | |||||||||||||||||
In this work we shall attempt an excursus across fundamentally
different streams of modern interpretations of the “ primitive
entities” constituting the social fabrics of economic systems. Behind
each specific interpretative story, there is a set of ceteris paribus
assumptions and also some fictitious tale on a 'once upon a time'
reconstruction of the theoretical primitives of the story
itself. Pushing it to the extreme, as we see it, there are in the
social sciences two archetypal (meta) tales. The first says, more or
less, that 'once upon a time' there were individuals with reasonably
structured and coherent preferences, with adequate cognitive
algorithms to solve the decision-action problems at hand, and with
self-seeking restrictions on preferences themselves. They met in some
openings in the forest and, conditional on the technologies available,
undertook some sort of general equilibrium trading or, as an
unavoidable second best, built organizations in order to deal with
technological non-convexities, trading difficulties, contract
enforcements, etc. In the alternative tale, 'once upon a time' there
were immediately factors of socialization and preference-formation of
individuals, including some institutions like families shaping
desires, representations and, possibly, cognitive
abilities. Non-exchange mechanisms of interactions appear in the
explanation from the start: authority, violence and persuasion of
parents upon children; obedience; schools; churches; and, generally,
the adaptation to particular social roles. Here 'institutions' are the
primitives, while 'preferences' and the very idea of 'rationality' are
derived entities. Which of the primitive tale is chosen bears
far-reaching consequences for the interpretation of socio-economic
organizational forms and their dynamics, and involves different
theoretical commitments on the interactions between agencies and
structures in human affairs. In this work, we argue for the need of
moving away from rationality-cum-equilibrium interpretations and of
focusing on the varying balances between self’orginizing dynamics and
institution-shaped constraints .
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