Intra-Firm Coordination through Rule-Following and the Emergence of Hierarchy

Rules and rule-following are becoming better understood as decision-making and coordination mechanisms. Further, that hierarchy is an under-appreciated element of natural spontaneous, rule-based, orders has caused confusion. The article argues firstly that the ability to meld rule-following and hierarchy in one theory of the firm presents an opportunity for a possible consistent Austrian theory of the firm. The paper then proceeds to discuss how rule-following is embedded in conventional theories of the firm and how a rule-based firm can create value in the larger spontaneous order of the extended market. The paper concludes by arguing that even though conventional views around hierarchy and the giving of orders within a firm may have a role, the conventional view may be under-privileging the role of rules, rule-following and the consequent natural emergence of hierarchy.

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The rule of rules

Public Choice ◽

10.1007/s11127-021-00872-3 ◽

2021 ◽

Author(s):

Alan Hamlin

Keyword(s):

Political Economy ◽

Social Order ◽

Political Order ◽

Constitutional Political Economy ◽

Rule Following ◽

Rule Based

AbstractRules are central to the constitutional political economy (CPE) approach. On this approach, rules, of a variety of types and forms, are necessary for the emergence of a political and social order, so that all genuine political order is rule-based. The central role of rules within the CPE approach is examined starting from an explicit definitional discussion of the concept of a rule and including discussion of the nature of rule-following behavior, the supply of rules, and rule enforcement.

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Augmenting Medical Diagnosis Decisions? An Investigation into Physicians’ Decision-Making Process with Artificial Intelligence

Information Systems Research ◽

10.1287/isre.2020.0980 ◽

2021 ◽

Author(s):

Ekaterina Jussupow ◽

Kai Spohrer ◽

Armin Heinzl ◽

Joshua Gawlitza

Keyword(s):

Artificial Intelligence ◽

Decision Making ◽

Medical Errors ◽

Decision Makers ◽

Medical Decision ◽

Decision Making Process ◽

Self Monitoring ◽

Rule Based ◽

Human Actors

Systems based on artificial intelligence (AI) increasingly support physicians in diagnostic decisions, but they are not without errors and biases. Failure to detect those may result in wrong diagnoses and medical errors. Compared with rule-based systems, however, these systems are less transparent and their errors less predictable. Thus, it is difficult, yet critical, for physicians to carefully evaluate AI advice. This study uncovers the cognitive challenges that medical decision makers face when they receive potentially incorrect advice from AI-based diagnosis systems and must decide whether to follow or reject it. In experiments with 68 novice and 12 experienced physicians, novice physicians with and without clinical experience as well as experienced radiologists made more inaccurate diagnosis decisions when provided with incorrect AI advice than without advice at all. We elicit five decision-making patterns and show that wrong diagnostic decisions often result from shortcomings in utilizing metacognitions related to decision makers’ own reasoning (self-monitoring) and metacognitions related to the AI-based system (system monitoring). As a result, physicians fall for decisions based on beliefs rather than actual data or engage in unsuitably superficial evaluation of the AI advice. Our study has implications for the training of physicians and spotlights the crucial role of human actors in compensating for AI errors.

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DO PRECEDENTS CREATE RULES?

Legal Theory ◽

10.1017/s1352325205050019 ◽

2005 ◽

Vol 11 (1) ◽

pp. 1-26 ◽

Cited By ~ 22

Author(s):

Grant Lamond

Keyword(s):

Decision Making ◽

Basic Assumption ◽

Common Law ◽

Rule Based ◽

Distinctive Features ◽

Conventional View ◽

Adequate Theory ◽

The Common

The doctrine of precedent is one of the most distinctive features of the modern common law. Understanding the operation of precedent is important for our theorizing about the nature of law, since any adequate theory must be compatible with the practice. In this paper I will explore the conventional view of precedent endorsed by practitioners and many legal philosophers alike. I will argue that for all its attractions, it provides a distorted view of the nature of precedent. The distortion grows out of the basic assumption that precedents create rules, and thus that the common law can be understood as a form of rule-based decision-making. Instead, the common law is a form of case-by-case decision-making, and the doctrine of precedent constrains this decision-making by requiring later courts to treat earlier cases as correctly decided. The relevance of earlier cases is not well understood in terms of rules—they are better understood as a special type of reason.

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Organizations and Markets

The Oxford Handbook of Austrian Economics ◽

10.1093/oxfordhb/9780199811762.013.12 ◽

2015 ◽

pp. 271-295 ◽

Cited By ~ 2

Author(s):

Nicolai J. Foss ◽

Pierre Klein ◽

Stefan Linder

Keyword(s):

Recent Literature ◽

Theory Of The Firm ◽

Austrian Economics ◽

Economic Calculation ◽

Austrian Theory ◽

New Directions ◽

Over Time ◽

Structure Of Production

Austrian economics focuses on markets but has much to say about organizations. In particular, Austrian insights on the structure of production, the heterogeneity and subjectivity of resources, the nature of uncertainty, the role of monetary calculation, and the function of the entrepreneur provide solid foundations for a distinctly Austrian theory of organizations. This chapter reviews these insights, discusses recent literature on Austrian economics and the theory of the firm, and suggests new directions for developing and extending an Austrian approach to organizations. In doing so it answers the following questions: Why, do organizations, large and small, emerge and persist? How do they avoid the problem of economic calculation faced by socialist economies? Why do organizations take the shapes they do, why do their characteristics vary over time and across industries, and why do they succeed or fail? Are most organizations stable over time, or do organizations, like markets, adapt and learn? and How do entrepreneurs arrange assets and manage individuals within organizations?

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Elaborating the role of reflection and individual differences in the study of folk-economic beliefs

Behavioral and Brain Sciences ◽

10.1017/s0140525x18000274 ◽

2018 ◽

Vol 41 ◽

Author(s):

Kevin Arceneaux

Keyword(s):

Decision Making ◽

Individual Differences ◽

Cognitive Processes ◽

Evolutionary History ◽

Behavioral Responses ◽

History Of ◽

Economic Beliefs

AbstractIntuitions guide decision-making, and looking to the evolutionary history of humans illuminates why some behavioral responses are more intuitive than others. Yet a place remains for cognitive processes to second-guess intuitive responses – that is, to be reflective – and individual differences abound in automatic, intuitive processing as well.

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The Role of Shared Decision-Making in Audiologic Rehabilitation

Perspectives on Aural Rehabilitation and Its Instrumentation ◽

10.1044/arri21.1.15 ◽

2014 ◽

Vol 21 (1) ◽

pp. 15-23 ◽

Cited By ~ 6

Author(s):

Helen Pryce ◽

Amanda Hall

Keyword(s):

Decision Making ◽

Shared Decision Making ◽

Behavior Changes ◽

Shared Decision ◽

Patient Centered ◽

Treatment Information ◽

Centered Care ◽

Potential Risks ◽

Audiologic Rehabilitation

Shared decision-making (SDM), a component of patient-centered care, is the process in which the clinician and patient both participate in decision-making about treatment; information is shared between the parties and both agree with the decision. Shared decision-making is appropriate for health care conditions in which there is more than one evidence-based treatment or management option that have different benefits and risks. The patient's involvement ensures that the decisions regarding treatment are sensitive to the patient's values and preferences. Audiologic rehabilitation requires substantial behavior changes on the part of patients and includes benefits to their communication as well as compromises and potential risks. This article identifies the importance of shared decision-making in audiologic rehabilitation and the changes required to implement it effectively.

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