‘Companies and spillovers: effects on the organisation and conduct’

Antoni Calvo Armengol, Manel Baucells Alibes, Ramón Casadesus Massanell.

The Arrow-Debreu paradigm of “general competitive equilibrium” (see e.g., Debreu 1959) reduces the economy to a set of anonymous relations between individuals, whose only point of contact is a set of prices “competitively” arrived at. Although this paradigm is of great help for getting a basic grasp of the economy, it is unsatisfactory as a foundation stone for the economy of business.

If companies exist it is precisely because not all transactions can be closed once only and in an anonymous manner. Likewise, not all inter-company effects can be reduced to pecuniary impacts. Our intention with this project is to develop complex models of the interaction between (and within) companies and organisations.

In particular, we want to study how spillovers (not necessarily pecuniary) impact on different dimensions of companies? conduct. Within this global framework, we will undertake a deeper exploration of certain aspects. One of our areas of concern are the highly intense, sustained relationships between the (few) companies that exert strong spillover effects on one another.

Another comprises the rather more diffuse spillovers that occur between larger sets of companies whose mutual relations form a complex network.

Finally, the complexity of inter-organisational relations poses a methodological problem. The empirical evidence suggests that most individuals use simple decision rules. Our idea is to study when these simple rules are actually appropriate.