Economics of Identity and Economics of the Firm: Why and How Their Three Central Questions Overlap
Journal of Institutional Economics, 9(3): 363-379
15 Pages Posted: 20 Aug 2013 Last revised: 11 Sep 2013
Date Written: 2013
This paper shows how the literature on identity can enhance the so-far underdeveloped appreciation of social context in the theory of the ﬁrm. While taking context into account, I explain why the literatures overlap in signiﬁcant ways and I propose an analytical map which relies on and matches the three central questions of both literatures. The three central questions on identity – identiﬁcation, individuation and multiple social identities – are coupled respectively with the three central questions on the ﬁrm – the nature of the ﬁrm, internal organization and ﬁrm boundaries. This identity-based extension of the economics of the ﬁrm contributes to the organization of the literature by extending the analysis of identity to questions that go beyond the primary question of identiﬁcation. In doing so, it identiﬁes two key research agendas: the role of internal organization in enabling individuation and the role of ﬁrm boundaries in enabling collective intentions.
Keywords: Identity, Individuation, Identification, Nature of the firm, Firm boundaries, Internal organization
JEL Classification: D01, D63, L22, Z13
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