This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

Journal of Economic Perspectives: Vol. 5 No. 2 (Spring 1991)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

JEP - All Issues


Organizations and Markets

Article Citation

Simon, Herbert A. 1991. "Organizations and Markets." Journal of Economic Perspectives, 5(2): 25-44.

DOI: 10.1257/jep.5.2.25

Abstract

The economies of modern industrialized society can more appropriately be labeled organizational economies than market economies. Thus, even market-driven capitalist economies need a theory of organizations as much as they need a theory of markets. The attempts of the new institutional economics to explain organizational behavior solely in terms of agency, asymmetric information, transaction costs, opportunism, and other concepts drawn from neoclassical economics ignore key organizational mechanisms like authority, identification, and coordination, and hence are seriously incomplete. The theory presented here is simple and coherent, resting on only a few mechanisms that are causally linked. Better yet, it agrees with empirical observations of organizational phenomena. Large organizations, especially governmental ones, are often caricatured as "bureaucracies," but they are often highly effective systems, despite the fact that the profit motive can penetrate these vast structures only by indirect means.

Article Full-Text Access

Full-text Article (Complimentary)

Authors

Simon, Herbert A. (Carnegie Mellon U)

JEL Classifications

D20: Production and Organizations: General
D40: Market Structure and Pricing: General

Comments

View Comments on This Article (0) | Login to post a comment


Journal of Economic Perspectives


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

JEP - All Issues

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us