@article{2010:boisot:organizati,
title = {Organization as a Nexus of Rules: Emergence in the Evolution of Systems of Exchange},
year = {2010},
note = {This paper seeks to explain the evolution of human systems of exchange
through the emergence of both fundamental forms of organization (such
as firms and markets) and specific instances of organization (such as
individual firms and other economic or social entities) for engaging
in exchange. We develop a combined systems, evolutionary, cognitive,
and game-theoretic perspective on organizing that broadly represents
organizations as systems of exchange founded on rules and routines for
ordering exchange (broadly construed) between agents. We characterize
the evolution of systems of exchange as an evolutionary cognitive
process in which agents learn from their exchange experiences to adapt
and improve rules and routines that improve the systems of exchange in
which they participate. An evolutionarily stable form or instance of
organization is achieved when a nexus of rules and routines emerges
that offers a Pareto preferable system of exchange that attracts
agents to its way of organizing exchange. We identify key aspects of
rules that determine their relative attractiveness and thus their
potential to be perceived as Pareto preferable by agents. We describe
how trial-and-error learning by agents as they apply and seek to
improve rules and routines in processes of exchange leads to the
emergence of innovative forms of organizing (distinguished by their
distinctive new nexus of rules) and to their dissemination, further
evolution, and perhaps eventual extinction within a population of
agents. We also distinguish the nexus-of-rules perspective on
organization developed here from the nexus of contracts perspective
common in the economic view of organization.},
journal = {mrev management revue},
pages = {378--405},
author = {Boisot, Max and Sanchez, Ron},
volume = {21},
number = {4}
}