Markets, Hierarchies, and Networks: An Agent‐Based Organizational Ecology

Markets, hierarchies, and networks are widely understood to be the three primary forms of social organization. In this article, we study the choice between these forms in a general, agent‐based model (ABM) of cooperation. The organizational ecology is the product, an emergent property, of the set of choices made by agents contingent on their individual attributes and beliefs about the population of agents. This is one of the first attempts to theorize explicitly the choice between different organizational forms, especially networks and hierarchies, and certainly the first to do so in an ABM. The insights of the model are applied to current research on transnational networks, social capital, and the sources of hierarchy and especially autocracy.