Models and explanations

In previous chapters, we have discussed two alternative (but complementary) in- terpretations of the invisible hand: the process interpretation and the end-state interpretation. Explanations that subscribe to the process interpretation of the in- visible hand may be considered as causal explanations for they focus on the mech- anisms that may bring about certain unintended

Models and representation

Models have many uses in everyday life, in science and in philosophy of science. Models might be material, visual, formal or representational, theoretical, or im- aginary. Mäki (2001a) argues that there is one thing common to all these different types of models: ‘they represent something beyond themselves’.13 In this sense, we may consider the

Models and theories

There are two prominent philosophical accounts of theories: the syntactic view and the semantic view. The syntactic view rests on an assumption of well-es- tablished theories that can be presented as axiomatic systems, and emphasises the linguistic and logical structure of theories. The syntactic view does not pay attention to the role of (partial)

Models, similarity and tendencies

In contrast to van Fraassen’s interpretation, Suppe and Giere’s versions of the se- mantic view suggest that models and theories represent (or have a chance to repre- sent) the way the world works, or the connecting principles of nature and society (see Chapter 5). But we have seen that if we conceive their general

Models and exploration

It is a fact of economics that models are explored. A quick look at any survey ar- ticle on a certain topic would reveal this fact. Generally, an influential model built on observations about the phenomenon under consideration, on knowledge of other areas of research and on knowledge available tools suggests something new. Other

Models as mediators

Finally, let us consider the implications of ‘exploration’ for our view of the rela- tion between models and theories. The semantic view helps us see one important fact about models: a collection of models of the same phenomenon (e.g. emer- gence of money) can be considered as supplying the resources for explaining sin- gular

Coordination conventions

Let us say that we want to explain the emergence of the ‘rules of the road’ and to show how such a convention could emerge merely from the interactions of indi- viduals who do not intend to bring it about. As we want to explain the emergence of the convention, we should start from

Coordination in the world of models

The driving game presented in Table 8.1 is a one-shot game. It may be considered as a representation of the state of affairs when two individuals face the aforemen- tioned coordination problem for the first time. Moreover, it serves as a representa- tion of the possible outcomes they may reach after making their choices.

Game theory and conventions: Focal points

Schelling’s (1960) focal point argument and Lewis’s concept of salience has been interpreted by game theorists in different ways. Game theorists have tried to in- tegrate the idea that individuals may be successful in coordination games if a certain strategy stands out as an obvious option into the formal structure of the game. Two

Smith, Jevons and Mises on money

1. Smith on money A similar story of the origin of money to that of Menger’s can be found in Adam Smith’s The Wealth of Nations. Smith builds the story of money on his ideas about the emergence of the division of labour: This division of labour, from which so many advantages are derived,

Models of emergence of money

1. Kiyotaki and Wright (1989) The expected discounted lifetime utility is defined as: where Ui  is the utility from consuming good i, Di*  is the disutility from producing good i* (i* ¹ # 1), and β is the discount factor. cij  denotes the cost of storing good j for type i. is equal to one

Explorations of the chequerboard world

It may be argued at the outset that if a model’s conjecture is interesting and prom- ising enough it will be subjected to many tests and explored in different ways. The chequerboard model is a good example in this respect. First of all, the cheq- uerboard model is widely cited in sociological and geographical

Focal points and risk dominance

This appendix introduces some of the concepts mentioned in Chapter 8 and presents some of the related issues for the convenience of the reader who is not much acquainted with game theory. 1. Salience and precedence Let us, for a moment, dispense with the assumptions concerning the driving game of Table 8.1 and think

Organizational Diversity

The ecological-evolutionary approach developed in this book directs attention primarily to organizational diversity. It seeks to answer the question. Why are there so many (or so few) kinds of organizations? Addressing this question means specifying (1) sources of increasing diversity, such as the creation of new forms, and (2) sources of decreasing diversity, such

Ecological Perspectives on Organizational Change

Although organizational processes figure prominently in social change, most macrosociological theory and research make little reference to systematic research on organizations. In Chapter 2 we argue that this situation reflects the partial intellectual isolation of the field of organizational sociology from the rest of the discipline during the 1960s and 1970s. Organizational sociologists made

The Demography and Ecology of Organizations

Ecological analysis is appropriate when organizations are subject to strong inertial pressures and face changeable, uncertain environments. Under these conditions there are strong parallels between processes of change in organizational populations and in biotic populations. In such cases it may be useful to eschew the typical social-scientific preoccupation with single organizations and their environments

Population Thinking in Ecological Perspective

The unit of observation in the studies we report is the individual organization. We follow the life histories of individual members of organizational populations, studying events such as founding, disbanding, and merger. The formal statistical analyses applied to such histories may look little different from analyses designed to test propositions at the level of

Evolution of Organizational Forms in Ecological Perspective

The view that selection processes govern the dynamics of organizational diversity shades naturally into a Darwinian evolutionary position. Such a position claims that long-run changes in organizational diversity reflect the accumulated effects of short-run differences in net mortality rates of popu- lations facing limited resource environments. Moving from a population ecology of organizations to

Dynamic and Comparative Analysis in Ecological Perspective

We think that research on organizational diversity must attend to dynamics and must analyze the entire range of variation within types of organizations. The remainder of this chapter summarizes these themes and previews the approach that we use in empirical analyses reported in Part III. 1. Dynamics The diversity of organizations in society depends on

Approaches to Defining Forms in Ecological Perspective

We have already noted that an organizational form gives unitary character to a population of organizations. But what does this mean concretely? A number of answers to this question have been given in the population- ecology literature. 1. Organizational Genetics One set of answers looks for an analogue to the genetic structure that reproduces