New Perspectives on the Modern Corporation series
Edited by Per-Olof Bjuggren and Dennis C. Mueller
Chapter 6: Competence and Learning in the Experimentally Organized Economy
1 Gunnar Eliasson and Åsa Eliasson INFORMATIONAL ASSUMPTIONS FOR A THEORY OF INDUSTRIAL DEVELOPMENT 1. The single most important empirical assumption in economic theory concerns the totality of all possible states the economy can be in. This universal state space of the model of the economy, or what we call the business opportunities space (Eliasson, 1990a) sets the limits both of what actors can do, and of how informed about their environment they can be. We introduce the knowledge based economy (Eliasson 1987b, 1990a, b; OECD, 1996), which establishes as a necessary assumption an economic opportunities space of immense complexity that is theoretically impossible to comprehend more than fractionally from any one place. Each actor understands only a miniscule fraction of the total opportunities space. Together, however, the understanding of all actors in the markets is much larger, but still only encompasses a fraction of the whole, and the tacitness of their knowledge or competence effectively restricts expansion of that understanding through collective coordination. Attempts to speed up exploration of the opportunities space through rivalrous competition in markets encounter rapidly escalating information and communications (transactions) costs in the short run. Such exploration, however, offers opportunities for learning and increases the number of creative encounters such that the opportunities space expands, and probably faster than it is being explored. Hence, we may all be growing increasingly ignorant of what is theoretically possible to know about. This information paradox, or what we will call the Särimner effect,2 is a fundamental,...
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