Social Heuristics-Decision Making and Innovation in a Networked Production Market

Social Heuristics-Decision Making and Innovation in a Networked Production Market

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SOCIAL HEURISTICS: DECISION MAKING AND INNOVATION IN A NETWORKED PRODUCTION MARKET Thomas D. Beamish, University of California, Davis* Nicole Woolsey Biggart, University of California, Davis Friday, January 08, 2010 UC Davis GSM MRN No. 01-10 * The authors are grateful for support from the California Institute for Energy Efficiency (CIEE), a research unit of the University of California, the Jerome J. and Elsie Suran Chair endowment, and the Institute for Governmental Affairs, University of California, Davis. Drafts of this paper have benefited from the generous critiques and comments of Fred Block; Vicki Smith; Lyn Lofland; Ryken Grattet; Dina Biscotti, Nathaniel Freiburger; Steve Vallas; Marc Ventresca; David Smilde; the Georgia Workshop on Culture and Institutions, Department of Sociology, University of Georgia; the Penn-Wharton Economic Sociology Conference; and Research Workshop on Institutions, Conflict, and Change, Kellogg Graduate School of Management, Northwestern University, and European Group on Organizations, Summer Workshop, Santorini, Greece. Direct correspondence to Thomas D. Beamish, Department of Sociology, University of California, Davis 95616, [email protected]
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Electronic copy available at: 2 Abstract In a study of failed innovation in the commercial construction industry we find that social heuristics —collectively constructed and maintained interpretive decision making frames— influence economic decision making practices and material outcomes. Social heuristics are widely institutionalized and commonly relied upon to reduce uncertainty in decision making; they provide actors with both a priori and ex post facto justifications for economic decisions that appear socially rational. In the commercial construction industry, social heuristics sustain market order but also discourage novel technologies and impede innovation. Social heuristics are actor- level constructs that reflect macro-level institutional arrangements and networked production relations. The concept of social heuristics offers the promise of developing a genuinely social theory of individual economic choice and action that is historically informed, contextually situated, and neither psychologically or structurally reductionist.
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