The Viability of the Survivor Principle | Organizations and Markets

The Viability of the Survivor Principle

1 December 2010 at 7:04 pm Lasse Leave a comment

| Lasse Lien |

The survivor principle holds that the competitive process weeds out inefficient firms, so that hypotheses about efficient behavior can be tested by observing how firms actually behave. This principle underlies a large body of empirical work in strategy, economics, and management. But do competitive markets actually display what is efficient? Can we safely make the shortcut of hypothesizing that, say X, is efficient, and then test that claim by observing whether firms actually do X? Surely the competitive process is somewhat noisy and imperfect. While we all know anecdotes that seem to disprove the SP it may still be a reasonable approximation in the aggregate. This astonishing paper tests the validity of the SP in the context of corporate diversification.

Entry filed under: - Lien -, Methods/Methodology/Theory of Science, Papers.

The Diversity of Strategic Management Research In Defense of Mathematical Economics

Leave a comment

Trackback this post | Subscribe to the comments via RSS Feed

Recent Posts

Categories

Feeds

Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).

Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).

Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).

Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).

Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).

Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).

Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).

Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).

Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).