The economic theory of rationality promises to equal mathematical logic in its importance for the mechanization of reasoning. We survey the growing literature on how the basic notions of probability, utility, and rational choice, coupled with practical limitations on information and resources, influence the design and analysis of reasoning and representation systems. 1 Introduction People make judgments of rationality all the time, usually in criticizing someone else's thoughts or deeds as irrational, or in defending their own as rational. Artificial intelligence researchers construct systems and theories to perform or describe rational thought and action, criticizing and defending these systems and theories in terms similar to but more formal than those of the man or woman on the street. Judgments of human rationality commonly involve several different conceptions of rationality, including a logical conception used to judge thoughts, and an economic one used to judge actions or...

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A number of potential advantages of industry agglomeration—or spatial clustering—have since long been identified in the research literature, notably related to shared costs for infrastructure, the build up of a skilled labour force, transaction efficiency, and knowledge spill-overs leading to firm learning and innovation. We identify two shortcomings of existing research on the clustering phenomenon. First, the abundance of theoretical concepts stands in sharp contrast with the general lack of work aiming to validate these mechanisms empirically and the contradictory evidence found in recent empirical work in the field. Secondly, there is a lack of a unified theoretical framework for analyzing spatial clustering. In an attempt to remedy the second shortcoming, this paper investigates the nature of the cluster from a knowledge creation or learning perspective. We argue for the need to establish a specific theory of the cluster where learning occupies center stage. The basic requirements for such a theory of the cluster are discussed. Two main components of such a theory are identified: it must explain the existence of the cluster on the one hand and its internal organization on the other.

Ten years have passed since the publication of my book The Road to a Free Economy: Shifting from a Socialist System—the Example of Hungary (referred to hereafter as Road.) It was the first book in the international literature to put forward comprehensive proposals for the post-socialist transition. This paper sets

Happiness and transition...................................................................................................... 3

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Explaining how entrepreneurs overcome information asymmetry between themselves and potential investors to obtain financing is an important issue for entrepreneurship research. Our premise is that economic explanations for venture finance, which do not consider how social ties influence this process, are undersocialized and incomplete. However, we also argue that organization theoretic arguments, which draw on the concept of social obligation, are oversocialized. Drawing on the organizational theory literature, and in-depth fieldwork with 50 high-technology ventures, we examine the effects of direct and indirect ties between entrepreneurs and 202 seed-stage investors on venture finance decisions. We show that these ties influence the selection of ventures to fund through a process of information transfer. (Entrepreneurship; Venture Finance; Social Capital) Entrepreneurs are often wealth constrained, and need to obtain external financing to pursue their opportunities, making financing central to the process of entrepreneurship (Evans and Leighton 1989, Casson

The paper analyzes some generic features of industrial dynamics whereby innovative change is carried, stochastically, by new entrants. Relying on the formal representation suggested in Winter et al. (1997), it studies both the asymptotic properties of such processes and their finite time dynamics to account for a few empirical stylized facts, including persistent entry and exit, skewed size distributions and turbulence in market shares.

Studies of national systems of innovation (NSI) are often focusing on the R&D system. This chapter will argue that the less conspicuous production and sales/purchase activities are alternative and in many ways more adequate points of departure, also for studying aspects of NSI which are apparently quite distant from this starting point.

doi 10.1287/mnsc.1040.0223