Conventions and Structures in Economic Organization

Conventions and Structures in Economic Organization

Markets, Networks and Hierarchies

New Horizons in Institutional and Evolutionary Economics series

Edited by Olivier Favereau and Emmanuel Lazega

This book contributes to the current rapprochement between economics and sociology. It examines the fact that individuals use rules and interdependencies to forward their own interests, while living in social environments where everyone does the same. The authors argue that to construct durable organizations and viable markets, they need to be able to handle both. However, thus far, economists and sociologists have not been able to reconcile the relationship between these two types of constraints on economic activity.


Emmanuel Lazega and Olivier Favereau

Subjects: economics and finance, economic psychology, history of economic thought, institutional economics, methodology of economics


Emmanuel Lazega and Olivier Favereau1 This book asserts that economists and sociologists need the combined concepts of conventions and structures to deal with markets and organizations. We argue that there is room for cooperation between the two disciplines when economists take into account conventions, and sociologists structures and flows of resources. Conventions refer to values, rules and representations that influence economic behaviour.2 Structures refer to patterns of interests and relationships reflecting resource interdependencies among members of any social system. At first sight, the relationship between conventions and structures is obvious. On the one hand, for example, the principle of reciprocity (as described by sociologists such as Mauss or Gouldner) can be conceived of as a convention. This convention may influence, for example, whom members of an organization approach for advice. In effect, one might think that members approach others with the most expertise, but very often this is not what happens: because they probably cannot give anything in return (or because they do not want to recognize these others’ status, or because they do not want to be perceived as inexperienced), they often approach people who are at a similar level, who may not know more about this special subject than they do, but for whom, at some point in the future, they will be able to return the favour. The rule of reciprocity will informally determine in part the shape of advice flows in the organization, and thus the structural opportunities and constraints weighing on members’ productive abilities. On...