The Behavioral Firm and Its Internal Game: Evolutionary Dynamics of Decision Making
Abstract
In this paper the firm is analyzed and modeled as a set of different subcoalitions (agents) each with their own objectives. It examines how the goals can be conflicting and in turn how this influences the payoff structure of the subcoalitions given that they follow 'simple' decision rules, i.e. rules of thumb. This implies that the subcoalitions act in aboundedly rational way. To see how these decision making procedures evolve we make use of an (evolutionary) dynamic game theoretical framework. Consequently, the main aim is to address the issue of modeling the dynamic and adaptive nature of the subcoalitions.