where do markets come from production markets have two sides producers are a fully connected clique transacting with buyers as a separate but aggregated clique each producer is a distinctive firm with a distinctive product each side continually monitors reactions of the other through the medium of a joint social construction the schedule of terms of trade each producer is guided in choice of volume by the tangible outcomes of other producers not by speculation on hypothetical reactions of buyers to its actions each producer acts purely on self interest based on observed actions of all others summarized through a feedback process the summary is the terms of trade schedule which reduces to constant price only in limiting cases the market emerges as a structure of roles with a differentiated niche for each firm explicit formulae both for firms and for market aggregates are obtained by comparative statics methods for one family of assumptions about cost structures and about buyers evaluations of differentiated products not just any set of firms can sustain terms of trade with any set of buyers there prove to be three main kinds of markets and three sorts of market failure within a parameter space that is specified in detail one sort of market paradox has a madison avenue flavor another is more conventional grind and a third crowded is a new form not included in any existing theory of markets current american industrial markets are drawn on for 20 illustrations of which three are presented in some detail inequality in firms market shares measured by gini coefficients is discussed

competition and social influence the diffusion of the sixth generation processor in the global computer industry1 when is a social actor most strongly influenced by its peers this article addresses this question by clarifying when computer firms were most strongly affected by the choices of their structurally equivalent rivals to adopt a well known technology intel s sixth generation processor the core hypothesis is that the effect of adoptions by structurally equivalent firms increases with the competitive pressure that a focal firm faces in its market position the results show that a chosen firm is most strongly influenced by comparable others when it faces scale based competition and is diversified the implications of this study are twofold a social actor s sensitivity to the conduct of others may depend not only on its place in a hierarchy but also on the nature of its ties to an external audience and a contingent theory of social influence may be necessary to characterize diffusion processes correctly particularly when external and time varying nonnetwork factors have significant effects

dynamics of niche width and resource partitioning this article examines the effects of crowding in a market center on rates of change in organizational niche width and on organizational mortality it proposes that although firms with wide niches benefit from risk spreading and economies of scale they are simultaneously exposed to intense competition an analysis of organizational dynamics in automobile manufacturing firms in france germany and great britain shows that competitive pressure not only increases the hazard of disbanding but also prompts organizational transformations that give rise to processes of resource partitioning emphasizing the content process distinction in conceptualizing organizational change the article finds that the process effect of changes in niche width and position increases mortality hazards we discuss our findings in light of the processes investigated by the ecological theories of density dependence resource partitioning and structural inertia and point to the theoretical links that help to integrate these theories

union membership and employment dynamics a note we analyze union behavior in a model with membership dynamics and compare the labor market outcomes to static union models based on empirical findings we modify standard models and show that the well known result that static models overstate distortions caused by unions only holds in the special case of firm level wage setting if however the union is big enough to determine employment for the whole sector it rather depends on both the elasticity of labor demand and union s time preference whether static frameworks overrate or even underrate unions distortions jel code c61 j50 j51

derivation of marginal effects of determinants of technical inefficiency in efficiency studies using the stochastic frontier approach the main focus is to explain inefficiency in terms of some exogenous variables and computation of marginal effects of each of these determinants although inefficiency is estimated by its mean conditional on the composed error term the jondrow et al 1982 estimator the marginal effects are computed from the unconditional mean of inefficiency wang 2002 in this paper we derive the marginal effects based on the jondrow et al estimator and use the bootstrap method to compute confidence intervals of the marginal effects

embeddedness cooperation and popular economy firms in the informal sector this paper is motivated by empirical observations on popular economy firms pefs in the informal sector of santiago de chile these are labor managed firms embedded in popular milieu where cooperation between their members plays a central role this paper develops a partial equilibrium microeconomic theory of pefs first it endogeneizes the level of cooperation between the workers second it develops a static and a dynamic model to analyze whether embeddedness influences the behavior of the pef embeddedness is assumed to be captured by three different characteristics suggested by the empirical observations most of them influence the employment and income levels in the pef

miners wages in post war britain an application of a model of trade union behavior the paper studies the determination of wages in the british coal industry a utility maximising model of a trade union is used to represent the behaviour of the national union of mineworkers a non linear structural model is derived and is estimated by full information maximum likelihood the results are quite encouraging there is support for a neo classical demand curve for miners labour and a significant estimate of workers relative risk aversion

why the microbrewery movement organizational dynamics of resource partitioning in the u s brewing industry1 the number of small specialty brewers in the u s beer brewing industry has increased dramatically in recent decades even as the market for beer became increasingly dominated by mass production brewing companies using the resource partitioning model of organizational ecology this article shows that these two apparently contradictory trends are fundamentally interrelated hypotheses developed here refine the way scale competition among generalist organizations is modeled and improve the theoretical development of the sociological bases for the appeal of specialist organizations products especially those related to organizational identity evidence drawn from qualitative and quantitative research provides strong support for the theory the article offers a brief discussion of the theoretical and substantive issues involved in application of the model to other industries and to other cultures

resource distributions and market partitioning dutch daily newspapers 1968 to 1994 resource partitioning theory explains how in heavily concentrated populations specialist organizations arise and proliferate the theory also addresses the process of market concentration itself although far less attention has been devoted to the theoretical claims in this area in this analysis the theory is used to explain generalist concentration through the distribution of environmental market resources it is argued that the higher the homogeneity and concentration of relevant environmental resources the higher the concentration of large generalist organizations competing on the basis of scale using data on the dutch daily newspaper industry from 1968 to 1994 statistical analyses show that concentration among generalist national newspapers occurs more fully in province level markets where the readership base consists of relatively homogeneous sets of individuals in terms of age religion politics and education at the same time these concentrated markets prove to be fertile areas for the operation of specialist papers at least when resources are not fully homogenized the analysis thus provides a more complete model of the resource partitioning process among organizations in a population

resource partitioning the founding of specialist firms and innovation the american feature film industry 1912 1929 past research has established that large bureaucratic firms are less innovative than other firms this reduced innovativeness is likely to be exacerbated when large firms engage in market control in cultural industries the effects can be especially pernicious resulting in the failure to provide audiences with artistic quality or product diversity we investigate the population dynamics of one cultural industry the early american feature film industry specifically we examine the hypothesis that concentration among large generalist firms will be associated with higher rates of foundings of specialist producers and specialist distributors we also investigate the question of whether these specialists are more innovative specifically we examine the hypothesis that specialists were more active than were generalists in the creation of new film genres in the early years of the american film industry we find that increased concentration among generalists had a positive effect on foundings of specialist producers and specialist distributors and that the specialists were more active in the creation of new film genres implications of these findings for future research both on cultural industries and on the population dynamics of the founding of specialist firms are discussed

population adaptation with newcomers and incumbents the effects of the organizational niche the article integrates three theory fragments of organizational ecology using symbolic logic it takes an earlier model that aligned inertia theory with red queen competition theory as a departure point and extends this model with temporal niche theory effects the conflicting predictions between earlier and new theory phases are reconciled by applying the knowledge updating feature of non monotonic logic the results indicate a rationale for discriminating between qualitative and quantitative aspects of environmental change and also for telling apart ways of organizational adaptation based on effectiveness and efficiency

union membership and employment dynamics with endogenous union density abstract based upon an intertemporal optimizing model of trade unions this paper proposes a plausible union density function and examines the relative level of employment between the intertemporal model and the conventional static model we find that endogenizing union density provides an incentive for the union that is concerned about its future membership level to hire a lower level of employment this opens the way to obtain the result that employment is lower in the intertemporal model than in the conventional static model we also find that the equilibrium employment level may not display a positive linkage with union membership after endogenizing union density

diversity scale and sustainability in human systems towards a research agenda abstract this paper explores the relationship between diversity locality scale and sustainability in human systems using examples from brewing steel production and printing it suggests mass production economies of scale has peaked creating new opportunities and challenges for sustainability science it is concluded that there is a potential research agenda in seeking to understand where how why at what cost and under what conditions smaller scale may yield sustainability advantages

a community level analysis of sources and rates of technological variation in the microprocessor market this research sought to identify the sources and rates of technological variation in an industry using a community level framework using data on all merchant producers of microprocessors from 1971

a dynamic model of union membership and employment a comment this paper re examines the dynamic features and the long run effects of raising interest rates on union membership and employment in the jones mckenna 1994 model two major findings emerge from the analysis first the dynamic system of jones and mckenna s model exhibits saddlepoint stability rather than global stability second when the economy experiences a rise in interest rate union membership will eventually converge to a higher level

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

on union preferences and labour market models insiders and outsiders this paper constructs a model of trade union behavior in which there is a distinction between insiders and outsiders this is used to examine one of the most troublesome issues in macroeconomic theory namely the extent to which a rise in aggregate demand might generate wage increases rather than growth in employment a generalization of the most widely used union utility function is presented the analysis reveals the conditions under which insiders will agree to let outsiders into employment derives two step wage preferences and proves a new result on wage rigidity copyright 1987 by royal economic society

recombinant property in east european capitalism recombinant property is a form of organizational hedging in which actors respond to uncertainty by deversifying assets redefining and recombining resources it is an attempt to hold resources that can be justified by more than one legitimating principle property tansformation in postsocialist hungary involves the decentralized reorganization of assets and the centralized management of liabilities together they blur the boundaries of public and private the boundaries of enterprises and the boundedness of justificatory principles enterprise level field research data on the ownership structure of hungary s 220 largest enterprises and banks and an examination of the government s recent debt consolidation programs suggest the emergence of a distinctively east european capitalism that will differ as much from west european capitalism as do contemporary east asian variants

grades of membership and legitimacy spillovers foreign banks in shanghai 1847 1935 in this study we formulated and tested a theory about how heterogeneity among subpopulations affects the degree to which organizations in these subpopulations contribute to and benefit from the overall population s legitimacy historical data on banking in shanghai were used firms in subpopulations with a higher grade of membership were found to contribute strongly to the legitimacy of the general population firms in subpopulations with a lower grade of membership benefited most from legitimacy spillovers the concepts of fuzzy density contrast and public acceptance were applied to measuring legitimacy

resource partitioning and the organizational dynamics of fringe banking we examine the emergence and proliferation of payday lenders fringe businesses that provide small short term but high cost loans we link the organizational dynamics of these businesses to two trends in consumer lending in the united states the continuing consolidation of mainstream financial institutions and the expansion of such institutions in the provision of financial services regarded as similar to payday loans we explain the coexistence in mature industries of large scale organizations in the market center and smaller specialists in the periphery by testing and extending the organizational model of resource partitioning our focus is on two under examined aspects of the model the dynamic underlying the partitioning process and the conditions under which the market remains partitioned the empirical analysis covers payday lenders banks and credit unions operating in wisconsin between 1994 and 2008

market positioning the shifting effects of niche overlap organizational ecology models of market dynamics emphasize the competitioninducing role of inter organizational niche overlap targeting similar market niches increases competitive pressure and thus reduces organizations fitness recent studies however have suggested that moderate niche overlap may positively influence organizational viability by enhancing comparability and promoting legitimacy spillovers data on consumers impressions of dutch music festivals and on the growth and decline of early internet search engines were used to test the proposition that niche overlap may in fact be non monotonically related to organizational fitness since new organizations must first gain recognition by being comparable to others they will benefit more from niche overlap than older incumbents the results confirm that both the appeal that organizations generate as well as their growth rates are non monotonically related to niche overlap and that positive effects of niche overlap decrease with organizational age

to be different or to be the same it s a question and theory of strategic balance this paper addresses the performance consequences of firm level strategic similarity past research observed that firms face pressures to be different and to be the same by differentiating firms reduce competition by conforming firms demonstrate their legitimacy both reduced competition and legitimacy improve performance this paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives the theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation empirical support for the theory is found in a longitudinal study of commercial banks several suggestions for developing a theory of strategic balance conclude the paper the theory s major implication is that firms should be as different as legitimately possible copyright 1999 john wiley sons ltd

long term evolutionary change in organizational populations theory models and empirical findings in industrial demography organizational ecology is a theoretical perspective on organizations that attempts to explain long term social evolution especially the rise and fall of organizational populations this artist review the most sustained demographic research program of the perspective one based on the density dependent model of legitimation and competition it discusses the theoretical model and evidence from industrial demography that has been offered in its support as well as criticisms that have been registered unresolved research problems of the program are identified and three major models in progress attempting to address these open questions are discussed and compared copyright 1997 by oxford university press

turning back the clock in baseball the increased prominence of extrinsic rewards and demand for authenticity this paper addresses why customers at times prefer traditional practices deemed more authentic to a domain particularly where these practices had previously been discarded as inferior i argue that customer demand for authenticity can be triggered when extrinsic rewards i e fame or money increase in prominence in a market causing audiences to doubt the motives of the market s producers i examine this dynamic in the context of major league baseball where appreciation for traditional stadium features seemingly arose after the advent of free agency heightened awareness and coverage of the economic rewards in the sport experimental analysis validates the proposed mechanism whereby increased fan exposure to extrinsic rewards increases concern about player inauthenticity which increases preference for traditional stadium features quantitative analysis of attendance patterns provides external validation for these experimental findings by showing that authenticity was more highly preferred in the for

getting known by the company you keep publicizing the qualifications and former associations of skilled employees when product quality cannot be ascertained in advance of purchase producers must convince relevant audiences that they are worthy of consideration as quality players we propose that quality oriented producers will selectively publicize information about their skilled employees in anticipation of signaling benefits which include the accrual of visibility and the projection of quality based identities we validate our perspective on publicizing affiliation information by analyzing how a sample of australian wine producers publicized specific career information about their skilled employees i e their winemakers including the names of certain former employers of these individuals copyright 2009 oxford university press

the competitive dynamics of status and niche width us investment banking 1920 1949 by integrating the status based model of market competition and the resource partitioning model this paper develops the resource status space imagery of markets and two propositions first the paper argues that the benefit that an organization derives from an increment in status is not independent of the organization s niche width second the paper considers the implications of status based stratification for the resource partitioning model s specification of the effects of increasing market concentration using the resource status space imagery this paper posits that if expanding generalists are reluctant to lower their status or are unable to increase their status they will expand within their current status level the expanding generalists will thus encroach on the niches of similar status generalists and specialists rather than expand into the niches of generalists across the whole status spectrum we discuss implications for the sociology of markets copyright 2000 by oxford university press

local appeal and competition in multiple geographic markets evidence from california retail banking between 1900 and 1990 this article assesses the effect of identity related local appeal when firms compete in multiple geographic markets and investigates how local appeal and multimarket advantages collectively determine the competitive strength of an organization compared with numerous studies that identified the benefits for being a chain system recent researches on organizational identity highlight the social sanctions and discount when an organizational form does not fully conform to the norms and expectations at a given market empirical evidence from california retail banks in the 20th century demonstrates that organizational identity can be an important source of competitive strength even when considerable scale and scope advantages exist however when customers are not locally oriented an organization s identity based appeal becomes less meaningful such a finding suggests the scope condition for organizational identity research

a generalized production frontier approach for estimating determinants of inefficiency in u s dairy farms this article investigates farm level efficiency of u s dairy farmers by estimating their technical and allocative efficiency technical inefficiency is assumed to be composed of a deterministic component that is a function of some farm specific characteristics and a random component by doing this we extend the stochastic frontier methodology in which determinants of technicial inefficiency are explicitly introduced in the model given the inputs variations in efficiency of farms are then explained by both deterministic and random components of technical inefficiency the empirical results indicate that a levels of education of the farmer are important factors determining technical inefficiency and b large farms are more efficient technically than small and medium sized farms both technical and allocative inefficiency are found to decrease with increase in the level of education of the farmer

a dynamic model of union membership and employment that it recognizes some link between present wage and employment levels and future membership and that it has an interest in the level of membership attained we model membership decisions with stochastic demand and a differential layoff rate for union and non union workers membership dynamics are behavioural in that membership increases when the utility of being a member exceeds the utility of not being a member the model permits a variety of possible relationships between employment and membership in the adjustment to steady state

coming forward the effects of social and regulatory forces on the voluntary restatement of earnings subsequent to wrongdoing we investigate the effects of social and regulatory forces on a firm s decision to disclose past wrongdoing by voluntarily restating its earnings with an eight year sample of more than 2 500 public firms including 170 voluntary restaters we find that firms are more likely to voluntarily restate their earnings in response to informal social pressures from other firms in their industry and less likely to do so in response to formal regulatory sanctions we also show that the impact of these forces varies with firm status we contribute to corporate governance and public policy research that examines the effectiveness of hard versus soft deterrence measures on firm compliance

the imprint of labor markets on entrepreneurial performance abstract using the 1979 2010 waves of the national longitudinal survey of youth our study tracks the earnings of individual entrepreneurs from the beginning of their entrepreneurial careers examining the effects of labor markets on their earnings trajectory results show that apart from self selection labor markets impose a penalty on the initial earnings of entrepreneurs who start a business in adverse economic conditions a disadvantage that persists for up to a decade we also identify two factors expected to alleviate the imprinting effect of labor markets migration outside the imprinting environment and serial entrepreneurship

union membership and employment dynamics abstract this note examines the behavior of a monopoly union that cares about its future membership and recognizes the dynamic dependence of membership on employment a characterization is given both of the steady state and of the interdependent employment and membership dynamics out of that steady state

the effect of outsiders on union contracts abstract a recent proposal for incorporating the insider outsider distinction into the static monopoly union model results in implausible comparative static properties this paper presents an alternative formulation that rehabilitates the monopoly union model

social identity market memory and first mover advantage considerable attention goes to whether there is a first mover advantage among organizations technical mechanisms have been considered for this advantage such as learning and occupancy of preferred market segments we argue that first movers may also benefit from a social identity advantage because being identified as the original in a market implies authenticity when first mover advantage is based on such an identity market memory is important initially audiences distinguish the originality of the first mover but as time passes such differences are less recognizable we find evidence of this pattern and that organizations are constrained from expanding beyond where their identity is established the results suggest the usefulness of a sociological approach to understanding the first mover strategy copyright 2013 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

measurement of production inefficiency in a technology and inefficiency heterogeneity setting this study shows how the estimates of production inefficiency and of the marginal effects of its determinants can be distorted if not accounting for technology and inefficiency heterogeneity this

the liability of good reputation a study of product recalls in the u s automobile industry in this paper we explore opposing theoretical claims about how organizational reputation affects market reactions to product defects on the one hand good reputation could be a disadvantage because expectations about product quality are more likely to be violated by defects in highly reputed products on the other hand a good reputation could be an advantage because of strong inertial effects on reputation orderings we empirically test these competing hypotheses using data on product recalls in the u s automobile industry from 1975 to 1999 our results support for the idea that reputation can be an organizational liability in that highly reputed firms suffer more market penalty as a result of their product recalls we also propose that the reputational effects are moderated by two important factors substitutability and generalism specialism our results show that having few substitutes with an equivalent level of reputation or a focused product identity stemming from specialism buffers the negative market reactions to product recalls we conclude with a discussion on the implications of these results for institutional reputation and status theories