Luigi Marengo | Scuola Superiore Sant'Anna (original) (raw)
Papers by Luigi Marengo
This paper is a preliminary attempt to cast a model for the analysis of the division of labour wh... more This paper is a preliminary attempt to cast a model for the analysis of the division of labour when the labour to be divided falls within the broad category of problem-solving. In general terms problem-solving activities are searches in large combinatorial spaces of components (moves of a game, procedures, rules and routines, components of a technological system, etc.) which interact in highly complex and non-linear ways. Usually many possible solutions exist, but they differ in terms of effectiveness and efficiency.
Organization Science, 2007
ABSTRACT Cyert and March's A Behavioral Theory of the Firm has been acknowledged as one o... more ABSTRACT Cyert and March's A Behavioral Theory of the Firm has been acknowledged as one of the most fundamental pillars on which evolutionary theorizing in economics is built. Nelson and Winter's 1982 book is pervaded by the philosophy and concepts previously developed by Cyert, March, and Simon. Behavioral notions, such as bounded rationality are also at the heart of economic theories of institutions such as transaction costs economics. In this paper, after briefly reviewing the basic concepts of evolutionary economics, we discuss its implications for the theory of organizations (and business firms in particular), and we suggest that evolutionary theory should coherently embrace an “embeddedness” view of organizations, whereby the latter are not simply efficient solutions to informational problems arising from contract incompleteness and uncertainty, but also shape the “visions of the world,” interaction networks, behavioral patterns, and the identity of the agents. After outlining the basic features of this perspective, we analyze its consequences and empirical relevance.
The Business of …, Jan 1, 2003
Springer
industry demand and firm costs vary stochastically and firm market shares evolve based on relativ... more industry demand and firm costs vary stochastically and firm market shares evolve based on relative firm prices. Firms set prices by choosing among simple pricing rules according to their past profitability. Using genetic programming, they show that if new rules emerge ...
Nonlinear Dynamics and …, Jan 1, 2005
Population learning in dynamic economies with endogenous network formation has been traditionally... more Population learning in dynamic economies with endogenous network formation has been traditionally studied in basic settings where agents face quite simple and predictable strategic situations (eg coordination). In this paper, we begin instead to explore ...
We present an evolutionary simulation model of industry dynamics with product innovation and di&#... more We present an evolutionary simulation model of industry dynamics with product innovation and diff:erentiated demand. The major goal of the paper is to unite two strands of the evolutionary literature on innovation that tend to be analysed in isolation. The paper calls for considering jointly the role of market competition and of technology complexity in shaping innovation patterns of an industry. Most of the earlier works on innovation study the eff:ects of innovation on competition, but do not consider the complexity aspect of exploring a complex landscapes. Conversely, complexity studies focus on the nature and limits of innovation patterns by bounded rational agents, irrespective of the eff:ects of economic competition in directing innovative eff:orts, such as funding R&D investments and shaping the type of innovation required to generate profi:ts. This work calls for uniting the two strands of the literature, considering explicitly: 1) the role of complex landscapes 2) the incentives of competitive firms. The paper proposes a model where fi:rms are represented as innovating agents in technological spaces of varying complexity. Such model is used to replicate some of the results already JEL -codes: L, D, -
LECTURE NOTES IN …, Jan 1, 1997
Our study aims at shedding light on the organizational mechanisms that produce differences in the... more Our study aims at shedding light on the organizational mechanisms that produce differences in the firms' innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME's and large firms, and between those firms that are operating in low-tech and high-tech industries.
The evolutionary foundations of economics, Jan 1, 2005
In the most generic terms, learning may occur in all circumstances when agents have an imperfect ... more In the most generic terms, learning may occur in all circumstances when agents have an imperfect understanding of the world in which they operate-either due to lack of information about it, or, more fundamentally, because of an imprecise knowledge of its structure; or ...
In this paper we contend that -contrary to what argued by a vast part of the literature -computer... more In this paper we contend that -contrary to what argued by a vast part of the literature -computer software and, more in general, digital goods (i.e. symbolic strings on an electronic medium with some economic value) do not present the characteristics of a public good as they do not suffer from lack of rivarly and excludability any more than other durable goods which are regularly allocated on competitive markets. We argue instead that the "market allocation problem" -if any -with digital goods does not arise from their public nature but from some peculiar characteristics of the production technology. The latter presents the nature of a typical problem solving activity as far as the production of the first unit is concerned, this means that innovative activities in computer software are characterized by high degrees of interdependencies, cumulativeness, sequentiality, path dependence and, more in general, sub-optimality arising from imperfect problem decompositions. As far as the production of further units is concerned, we observe instead high (but not infinite) expansibility and perfect codification (lack of any tacit dimension) which make diffusion costs rapidly fall. Given such claims, we argue that a standard "Coasian" approach to property rights, designed to cope with the externalities of semi-public goods may not be appropriate for computer software, as it may decrease both ex-ante incentives to innovation and ex-post efficiency of diffusion. On the other hand the institutional definition of property rights may strongly influence the patterns of technological evolution and division of labor in directions which are not necessarily optimal.
The evolution of economic …, Jan 1, 2001
LEM Papers Series, Jan 1, 2011
This paper presents a critical overview of some recent attempts at building formal models of orga... more This paper presents a critical overview of some recent attempts at building formal models of organizations as information-processing and problem-solving entities. We distinguish between two classes of models according to two distinct objects of analysis. The first class includes models mainly addressing information processing and learning; the second class includes models focusing upon the relationship between the division of cognitive labor and search process in some problem-solving space. The results begin to highlight important comparative properties regarding the impact on problem-solving efficiency and learning of different forms of hierarchical governance, the dangers of lock-in associated with specific forms of adaptive learning, the relative role of "online" vs. "offline" learning, the impact of the "cognitive maps" which organizations embody, the possible trade-offs between accuracy and speed of convergence associated with different "decomposition schemes", the (ambiguous) role of organizational memory in changing environments. We argue that these are important formal tools towards the development of a comparative institutional analysis focusing on the distinct properties of different forms of organization and accumulation of knowledge.
students.law.umich.edu
This paper attempts a critical assessment of both the theory and the empirical evidence on the ro... more This paper attempts a critical assessment of both the theory and the empirical evidence on the role of appropriability and in particular of Intellectual Property Right (IPR) as incentives for technological innovation. We start with a critical discussion of the standard justification of the attribution of IPR in terms of "market failures" in knowledge generation. Such an approach we argue misses important features of technological knowledge and also neglects the importance of non-market institutions in the innovation process. Next, we examine the recent changes in the IPR regimes and their influence upon both rates of patenting and underlying rates of innovation. The evidence broadly suggests that, first, IPRs are not the most important device apt to "profit from innovation"; and second, they have at best no impact, or possibly even a negative impact on the underlying rates of innovation. Rather, we argued, technology-and industry-specific patterns of innovation are primarily driven by the opportunities associated with each technological paradigm. Conversely, firm-specific abilities to seize them and "profit from innovation" depend partly on adequacy of the strategic combinations identified by the taxonomy of Teece (1986) and partly on idiosyncratic capabilities embodied in the various firms.
This paper is a preliminary attempt to cast a model for the analysis of the division of labour wh... more This paper is a preliminary attempt to cast a model for the analysis of the division of labour when the labour to be divided falls within the broad category of problem-solving. In general terms problem-solving activities are searches in large combinatorial spaces of components (moves of a game, procedures, rules and routines, components of a technological system, etc.) which interact in highly complex and non-linear ways. Usually many possible solutions exist, but they differ in terms of effectiveness and efficiency.
Organization Science, 2007
ABSTRACT Cyert and March's A Behavioral Theory of the Firm has been acknowledged as one o... more ABSTRACT Cyert and March's A Behavioral Theory of the Firm has been acknowledged as one of the most fundamental pillars on which evolutionary theorizing in economics is built. Nelson and Winter's 1982 book is pervaded by the philosophy and concepts previously developed by Cyert, March, and Simon. Behavioral notions, such as bounded rationality are also at the heart of economic theories of institutions such as transaction costs economics. In this paper, after briefly reviewing the basic concepts of evolutionary economics, we discuss its implications for the theory of organizations (and business firms in particular), and we suggest that evolutionary theory should coherently embrace an “embeddedness” view of organizations, whereby the latter are not simply efficient solutions to informational problems arising from contract incompleteness and uncertainty, but also shape the “visions of the world,” interaction networks, behavioral patterns, and the identity of the agents. After outlining the basic features of this perspective, we analyze its consequences and empirical relevance.
The Business of …, Jan 1, 2003
Springer
industry demand and firm costs vary stochastically and firm market shares evolve based on relativ... more industry demand and firm costs vary stochastically and firm market shares evolve based on relative firm prices. Firms set prices by choosing among simple pricing rules according to their past profitability. Using genetic programming, they show that if new rules emerge ...
Nonlinear Dynamics and …, Jan 1, 2005
Population learning in dynamic economies with endogenous network formation has been traditionally... more Population learning in dynamic economies with endogenous network formation has been traditionally studied in basic settings where agents face quite simple and predictable strategic situations (eg coordination). In this paper, we begin instead to explore ...
We present an evolutionary simulation model of industry dynamics with product innovation and di&#... more We present an evolutionary simulation model of industry dynamics with product innovation and diff:erentiated demand. The major goal of the paper is to unite two strands of the evolutionary literature on innovation that tend to be analysed in isolation. The paper calls for considering jointly the role of market competition and of technology complexity in shaping innovation patterns of an industry. Most of the earlier works on innovation study the eff:ects of innovation on competition, but do not consider the complexity aspect of exploring a complex landscapes. Conversely, complexity studies focus on the nature and limits of innovation patterns by bounded rational agents, irrespective of the eff:ects of economic competition in directing innovative eff:orts, such as funding R&D investments and shaping the type of innovation required to generate profi:ts. This work calls for uniting the two strands of the literature, considering explicitly: 1) the role of complex landscapes 2) the incentives of competitive firms. The paper proposes a model where fi:rms are represented as innovating agents in technological spaces of varying complexity. Such model is used to replicate some of the results already JEL -codes: L, D, -
LECTURE NOTES IN …, Jan 1, 1997
Our study aims at shedding light on the organizational mechanisms that produce differences in the... more Our study aims at shedding light on the organizational mechanisms that produce differences in the firms' innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME's and large firms, and between those firms that are operating in low-tech and high-tech industries.
The evolutionary foundations of economics, Jan 1, 2005
In the most generic terms, learning may occur in all circumstances when agents have an imperfect ... more In the most generic terms, learning may occur in all circumstances when agents have an imperfect understanding of the world in which they operate-either due to lack of information about it, or, more fundamentally, because of an imprecise knowledge of its structure; or ...
In this paper we contend that -contrary to what argued by a vast part of the literature -computer... more In this paper we contend that -contrary to what argued by a vast part of the literature -computer software and, more in general, digital goods (i.e. symbolic strings on an electronic medium with some economic value) do not present the characteristics of a public good as they do not suffer from lack of rivarly and excludability any more than other durable goods which are regularly allocated on competitive markets. We argue instead that the "market allocation problem" -if any -with digital goods does not arise from their public nature but from some peculiar characteristics of the production technology. The latter presents the nature of a typical problem solving activity as far as the production of the first unit is concerned, this means that innovative activities in computer software are characterized by high degrees of interdependencies, cumulativeness, sequentiality, path dependence and, more in general, sub-optimality arising from imperfect problem decompositions. As far as the production of further units is concerned, we observe instead high (but not infinite) expansibility and perfect codification (lack of any tacit dimension) which make diffusion costs rapidly fall. Given such claims, we argue that a standard "Coasian" approach to property rights, designed to cope with the externalities of semi-public goods may not be appropriate for computer software, as it may decrease both ex-ante incentives to innovation and ex-post efficiency of diffusion. On the other hand the institutional definition of property rights may strongly influence the patterns of technological evolution and division of labor in directions which are not necessarily optimal.
The evolution of economic …, Jan 1, 2001
LEM Papers Series, Jan 1, 2011
This paper presents a critical overview of some recent attempts at building formal models of orga... more This paper presents a critical overview of some recent attempts at building formal models of organizations as information-processing and problem-solving entities. We distinguish between two classes of models according to two distinct objects of analysis. The first class includes models mainly addressing information processing and learning; the second class includes models focusing upon the relationship between the division of cognitive labor and search process in some problem-solving space. The results begin to highlight important comparative properties regarding the impact on problem-solving efficiency and learning of different forms of hierarchical governance, the dangers of lock-in associated with specific forms of adaptive learning, the relative role of "online" vs. "offline" learning, the impact of the "cognitive maps" which organizations embody, the possible trade-offs between accuracy and speed of convergence associated with different "decomposition schemes", the (ambiguous) role of organizational memory in changing environments. We argue that these are important formal tools towards the development of a comparative institutional analysis focusing on the distinct properties of different forms of organization and accumulation of knowledge.
students.law.umich.edu
This paper attempts a critical assessment of both the theory and the empirical evidence on the ro... more This paper attempts a critical assessment of both the theory and the empirical evidence on the role of appropriability and in particular of Intellectual Property Right (IPR) as incentives for technological innovation. We start with a critical discussion of the standard justification of the attribution of IPR in terms of "market failures" in knowledge generation. Such an approach we argue misses important features of technological knowledge and also neglects the importance of non-market institutions in the innovation process. Next, we examine the recent changes in the IPR regimes and their influence upon both rates of patenting and underlying rates of innovation. The evidence broadly suggests that, first, IPRs are not the most important device apt to "profit from innovation"; and second, they have at best no impact, or possibly even a negative impact on the underlying rates of innovation. Rather, we argued, technology-and industry-specific patterns of innovation are primarily driven by the opportunities associated with each technological paradigm. Conversely, firm-specific abilities to seize them and "profit from innovation" depend partly on adequacy of the strategic combinations identified by the taxonomy of Teece (1986) and partly on idiosyncratic capabilities embodied in the various firms.