A computational theory of the firm

Barr, Jason; Saraceno, Francesco

doi:10.1016/s0167-2681(02)00002-1

Cited by 43 publications

(12 citation statements)

References 16 publications

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“…This model conforms to previous findings (Barr and Saraceno, 2002;2005) on the relationship between firm profitability, size and the environment it faces. Environmental complexity negatively affects profits, and the tradeoff between speed and accuracy emerges in this setting as well, giving a hump shape relationship between firm size and profit.…”

Section: Regression Resultssupporting

confidence: 90%

“…Agents within the firm are required to evaluate data and communicate this evaluation to others who then make final decisions. As discussed in Barr and Saraceno (2002;2005), the benefit to the firm of increased resources devoted to information processing (IP) is better knowledge of the environment; but the costs include the wage of IP agents, and, especially, the time costs involved with processing and communicating this information. Barr and Saraceno (2005) investigate how learning affects a firm's ability to produce along the best response function in a Cournot duopoly game with unknown demand.…”

Section: Introductionmentioning

confidence: 99%

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Organization, learning and cooperation

Barr

Saraceno

2009

Journal of Economic Behavior & Organization

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This paper models the organization of the firm as a type of artificial neural network in a duopoly setting. The firm plays a repeated Prisoner's Dilemma type game, but must also learn to map environmental signals to demand parameters and to its rival's willingness to cooperate. We study the prospects for cooperation given the need for the firm to learn the environment and its rival's output. We show how profit and cooperation rates are affected by the sizes of both firms, their willingness to cooperate, and by environmental complexity. In addition, we investigate equilibrium firm size and cooperation rates.JEL Classification: C63, C72, D21, D83, L13

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Section: Regression Resultssupporting

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Organization, learning and cooperation

Barr

Saraceno

2009

Journal of Economic Behavior & Organization

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“…Prior applications of simulation models in strategy and organization include the evolution of organizational structures (e.g. Carley & Svoboda, 1996;Miller, 2001), individual effort and free-riding (Axtell, 1999), organizational norms (March, 1991), information-processing (Carley, 1992;Barr & Saraceno, 2002), and adaptation in complex task environments (Levinthal, 1997;Rivkin & Siggelkow, 2005;Ethiraj & Levinthal, 2002;Knudsen & Levinthal, 2007). While these contributions have shed light on organizational processes, explicit contributions to fundamental issues of entrepreneurship are thus far virtually non-existent, providing fertile ground for future research.…”

Section: Furthering Entrepreneurship Research By Means Of the Theory mentioning

confidence: 99%

Opportunities and new business models: Transaction cost and property rights perspectives on entrepreneurship

Stieglitz¹,

Foss²

2009

Advances in Strategic Management

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“…In addition, Barr and Saraceno (2002) model a firm as a type of neural network whose objective is to learn the external environment. The neural network is a particular type of organizational structure that is capable of learning a data set.…”

Section: Information Processing Organizationsmentioning

confidence: 99%