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"Foreword" [2011] ELECD 234; in Zumbansen, Peer; Calliess, Gralf-Peter (eds), "Law, Economics and Evolutionary Theory" (Edward Elgar Publishing, 2011)

Book Title: Law, Economics and Evolutionary Theory

Editor(s): Zumbansen, Peer; Calliess, Gralf-Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848448230

Section Title: Foreword

Number of pages: 1

Extract:

Foreword
The self-interested behavior that lies at the heart of economic theories of why firms exist
and grow manifests itself in two very different variants, both of which were recognized
by the Nobel Committee last year. One is opportunistic behavior of the kind that Oliver
Williamson in particular paid attention to, which necessitates the construction of legal
and hierarchical safeguards to minimize the costs of opportunism in exchange relations.
The other is cooperative or even altruistic behaviour, that has been the focus of Elinor
Ostrom's work, which results in the possibility of transactions taking place, even when
the prevailing conditions do not provide sufficient formal support.
One way to conceptualize the ways in which firms mitigate the problems arising from
both opportunism as well as cooperation is to view them as co-evolutionary processes.
The essential feature of these co-evolutionary processes is that firms are not merely
subject to selection rules, but through their own agency, they are in a position to influ-
ence the content of the rules they are governed by. The outcome of these processes is
dependent on the variety of self-interested behaviour in question. If such co-evolutionary
processes are driven by self-interested behaviour of the opportunistic kind, the result is
likely to be something like destructive lobbying or regulatory capture. If, on the other
hand, they represent a cooperative variety, this can result in new solutions to persistent
problems of underinvestment and lack of technological capability, such as in the ...