The Evolution of Organizational Conventions and Gains from Diversity.

This paper investigates, by using a highly abstract evolutionary game model, the mechanism of evolution of different organizational conventions, as well as roles of free trade, integration, experiments, emulation and entrepreneurial foresight for exploring gains from organizational diversity. It focuses on an aspect of organization as a voluntary association of economic agents trying to overcome the bounds of their rationality, scope of action and competence, rather than as an 'instrument' for entrepreneurial maximizing behavior, and identifies two generic forms of organization as an information system. The paper concludes by discussing the relevance of the evolutionary game model for understanding actual organizational evolutionary processes in North America and Japan. [ABSTRACT FROM AUTHOR]