Thursday, April 5, 2012

A Behavioral Theory of the Firm

I love reading old business books that print the source code for models the authors' build in old computer languages.  A Behavioral Theory of the Firm is one of those books.  I saw a snippet of this book on Carnegie Mellon's website where they show off the achievements of their most distinguished alumni.  They showed a snapshot of a flowchart of a business process and at that moment I had to pick up the book (thanks Amazon).  I'm just in the initial chapters, but found some good nuggets already:

The following list describes their research strategy:
  1. Focus on a small number of key economic decisions made by the firm.
  2. Develop process-oriented models of the firm.
  3. Link models of the firm as closely as possible to empirical observations.
  4. Develop a theory with generality beyond the specific firms studied.
...Nothing short of a brilliant start to a seminal work.

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