Integrating Economic and Organization Theory
Edited by Anna Grandori
Chapter 14: Organizational formation and change: lessons from economic laboratory experiments
This chapter reviews research in which economic laboratory experiments shed light on the processes that influence organizational formation and change. An organization, in these experiments, is represented by an abstract collective production activity that takes place in a controlled laboratory setting with incentivized human subjects. The studies typically attempt to identify factors that enhance efficient production. Our review focuses on experiments that explore features of how organizations originate, grow, and implement change, and the roles of communication and leadership in managing these processes. Our survey concludes that laboratory experiments of this type present a useful way to identify important factors that influence the relationship between individual behaviors and organizational performance at critical stages, which might otherwise be difficult to isolate outside the laboratory.
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