A model of cognitive and operational memory of organizations in changing worlds

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis work analyzes and models the nature and dynamics of organizational memory, as such an essential ingredient of organizational capabilities. There are two sides to it, namely a cognitive side, involving the beliefs and interpretative frameworks by which the organization categorizes the states of the world and its own internal states, and an operational one, including routines and procedures that store the knowledge of how to do things. We formalize both types of memory by means of evolving systems of condition-action rules and investigate their performance in different environments characterized by varying degrees of complexity and non-stationarity. Broadly speaking, in simple and stable environments memory does not matter, provided it satisfies some minimal requirements. In more complex and gradually changing ones more memory is better. However there is some critical level of environmental instability above which forgetfulness is evolutionary superior from the point of view of long term performance. Moreover, above some (modest) complexity threshold stable and robust cognitive categorizations and routinized behavior emerge.

In order to stand up you must keep cycling: Change and coordination in complex evolving economies

“…A promising candidate to model them finds its roots into the formalism of classifier systems (Holland, 1975(Holland, , 1986: a pioneering application developed in Marengo, (1992) and subsequent refinements in Dosi et al, (2017). On the ground of such formal apparatus one can first analyze the effects in terms of performances of different distributions of knowledge and of the related memory elements within the organization (e.g.…”

Rational Heuristics? Expectations and Behaviors in Evolving Economies With Heterogeneous Interacting Agents

“…Simulation results show that in line with the K + S tradition, the model with simple expectation formation processes can account for endogenous growth and business cycles, where mild fluctuations are punctuated by deep downturns (Fagiolo, Napoletano, and Roventini ), as well as for a wide ensemble of macro and micro empirical regularities (Dosi et al ). Moreover, we find that compared to simple (benchmark) myopic expectations, somewhat more complex heuristics increase the forecast errors of the agents and do not substantially improve the performance of the system (see also Dosi, Fagiolo, and Roventini ).…”

“…This work extends the Keynes + Schumpeter (K + S) family of models that have already been extensively explored (Dosi, Fagiolo, and Roventini ; Dosi et al , , , ) by introducing different expectation formation rules. The barebone structure of the model is portrayed in Figure…”

“…To study particularly the effects of different rules concerning expectation formation in a concrete general equilibrium dynamic model, we extend the Keynes + Schumpeter (K + S) model (Dosi et al , , , ; Dosi, Fagiolo, and Roventini ), the structure of which is particularly well suited for accounting for heterogeneous expectation rules and adaptive learning because of the “deep uncertainty” which is embedded in it. It is designed so that agents cannot easily learn from observing outcomes about the underlying structure, and especially so because outcomes are a function of actions which themselves are based on beliefs about the economy, which are heterogeneous and evolving.…”

Understanding financial behaviour for better policy making: an introduction

“…One way to deal with this new emerging field is to rely on the tools of mainstream behavioural economics and in particular with Heuristics and Biases programmes. An alternative preferred way is to follow the Simonian tradition of science of administration (March and Simon, 1958) and the post-Schumpeterian tradition of the theory of the firm (for example Dosi et al, 2017), empowered by the new programme of ecological rationality and simple heuristics (Artinger et al, 2014;Loock and Hinnen, 2015). 8 The study of simple heuristics took place mainly at the individual level or at most "in the wild" (used for example by professional figures or employees in bureaucratic organizations) (Gigerenzer et al, 2011).…”