Ravshan Hojimatov
@hojimat.bsky.social
Economist | Complex Systems | Agent-based modeling | PhD | hojimat.com
There are a couple of insights from complexity that are actually useful, like emergence and path-dependence. Just making everyone aware of them is already enough contribution for the future of modeling. However, ultimately, there doesn't seem to be a bright future for it as a separate field.
November 11, 2025 at 3:22 AM
There are a couple of insights from complexity that are actually useful, like emergence and path-dependence. Just making everyone aware of them is already enough contribution for the future of modeling. However, ultimately, there doesn't seem to be a bright future for it as a separate field.
Thanks for the feedback! The thread is not over yet. I will try to complete it within next few days. Tune in!
November 9, 2025 at 1:59 PM
Thanks for the feedback! The thread is not over yet. I will try to complete it within next few days. Tune in!
24. Together these three books make up the Big 3 of the Carnegie school
November 9, 2025 at 12:01 PM
24. Together these three books make up the Big 3 of the Carnegie school
23. Satisficing = satisfy + suffice is, in a way, a bounded rational alternative to global optimization, where agents have a certain goal and they stop their search once that goal is reached - i.e. they don't continue their optimization indefinitely.
November 9, 2025 at 12:01 PM
23. Satisficing = satisfy + suffice is, in a way, a bounded rational alternative to global optimization, where agents have a certain goal and they stop their search once that goal is reached - i.e. they don't continue their optimization indefinitely.
22. Bounded rational agents cannot optimize using first order conditions - either they are cognitively limited or the tasks they face are incredibly hard. What they do is they engage in a search for better performing decisions by trying new stuff and adopting what works better.
November 9, 2025 at 12:01 PM
22. Bounded rational agents cannot optimize using first order conditions - either they are cognitively limited or the tasks they face are incredibly hard. What they do is they engage in a search for better performing decisions by trying new stuff and adopting what works better.
21. Of course, they didn't stop at identifying the limitations - they also proposed the ways to deal with them - "search" and "satisficing".
November 9, 2025 at 12:01 PM
21. Of course, they didn't stop at identifying the limitations - they also proposed the ways to deal with them - "search" and "satisficing".
20. Cyert & March (1963) coined the term "bounded rationality". To be honest, I was surprised to learn it’s that old, I always assumed it was a newer idea from the Kahneman-Tversky-Thaler era. #EconTwitter
November 9, 2025 at 12:01 PM
20. Cyert & March (1963) coined the term "bounded rationality". To be honest, I was surprised to learn it’s that old, I always assumed it was a newer idea from the Kahneman-Tversky-Thaler era. #EconTwitter
19. March and Simon (1958) formalized these ideas and talked in length about how organization must be modeled as different agents with cognitive limitations and conflicting goals coming together to work on a big project/task.
November 9, 2025 at 12:01 PM
19. March and Simon (1958) formalized these ideas and talked in length about how organization must be modeled as different agents with cognitive limitations and conflicting goals coming together to work on a big project/task.
18. Herbert Simon (1947) was concerned about both perfect rationality and profit maximization assumptions and argued for more human-centric view of organizations, but these ideas were still vague and not formalized. btw you should read his autobiography "Models of My Life"
November 9, 2025 at 12:01 PM
18. Herbert Simon (1947) was concerned about both perfect rationality and profit maximization assumptions and argued for more human-centric view of organizations, but these ideas were still vague and not formalized. btw you should read his autobiography "Models of My Life"
17. Carnegie school originated at Carnegie Institute of Technology aka Carnegie Mellon University in late 40s and 50s with the big trio - Simon, Cyert, and March.
November 9, 2025 at 12:01 PM
17. Carnegie school originated at Carnegie Institute of Technology aka Carnegie Mellon University in late 40s and 50s with the big trio - Simon, Cyert, and March.
16. In the meantime, a completely different stream of research had been quietly thriving. And it all started with "Carnegie school".
November 9, 2025 at 12:01 PM
16. In the meantime, a completely different stream of research had been quietly thriving. And it all started with "Carnegie school".
15. The mainstream view never bothered to unpack the black box of the "firm" to see what is going on inside of it. As late as 1992, Paul Migrom said about profit maximizing firms "yeah, we are aware that it is not that simple, but you know, we do it and you just deal with it"
November 9, 2025 at 12:01 PM
15. The mainstream view never bothered to unpack the black box of the "firm" to see what is going on inside of it. As late as 1992, Paul Migrom said about profit maximizing firms "yeah, we are aware that it is not that simple, but you know, we do it and you just deal with it"
14. This "rational expectations" approach to organizations has been very fruitful but it still had this classical idea of individuals as tools. Shapiro and Stiglitz (1984) said that the threat of unemployment is a great way to ensure that employees work harder. I mean...come on!
November 9, 2025 at 12:01 PM
14. This "rational expectations" approach to organizations has been very fruitful but it still had this classical idea of individuals as tools. Shapiro and Stiglitz (1984) said that the threat of unemployment is a great way to ensure that employees work harder. I mean...come on!
13. The question "what to put inside organization and what to leave to the market forces?" would later jump start an entire field of "New institutional economics".
November 9, 2025 at 12:01 PM
13. The question "what to put inside organization and what to leave to the market forces?" would later jump start an entire field of "New institutional economics".
12. Similarly, Williamson (1981) studied the reasons for why organizations even exist. He introduced "transaction cost theory", where markets/prices are good and all but have transaction costs and integrating some aspects of production into the firm might reduce these costs.
November 9, 2025 at 12:01 PM
12. Similarly, Williamson (1981) studied the reasons for why organizations even exist. He introduced "transaction cost theory", where markets/prices are good and all but have transaction costs and integrating some aspects of production into the firm might reduce these costs.
11. The "neoclassical" approach used all tools from math and econ and tackled the questions that is could answer using these tools. For example, agency theory showed how performance-based pay and profit sharing can be used to align individual and organizational incentives.
November 9, 2025 at 12:01 PM
11. The "neoclassical" approach used all tools from math and econ and tackled the questions that is could answer using these tools. For example, agency theory showed how performance-based pay and profit sharing can be used to align individual and organizational incentives.
10. In 50s the organizational studies become more rigorous and branch out into two streams, which I will loosely call "neoclassical" and "behavioral", although no such formal distinction exists.
November 9, 2025 at 12:01 PM
10. In 50s the organizational studies become more rigorous and branch out into two streams, which I will loosely call "neoclassical" and "behavioral", although no such formal distinction exists.
9. Around the same time Maslow (1943) comes up with his hierarchy of needs and forever shuts up every manager who says "Why aren't you doing what you are told? You are an adult and you get paid for this work!". Because money is not all that people care about!
November 9, 2025 at 12:01 PM
9. Around the same time Maslow (1943) comes up with his hierarchy of needs and forever shuts up every manager who says "Why aren't you doing what you are told? You are an adult and you get paid for this work!". Because money is not all that people care about!
8. In 1930s, Elton Mayo runs famous "Hawthorne studies" in electric factories. The surveys accidentally find that, personal relations between workers and managers were much more important for performance than the brightness of the light bulbs in the factory.
November 9, 2025 at 12:01 PM
8. In 1930s, Elton Mayo runs famous "Hawthorne studies" in electric factories. The surveys accidentally find that, personal relations between workers and managers were much more important for performance than the brightness of the light bulbs in the factory.
7. Henri Fayol (1918) thankfully focused on managers not employees. He said that managers should ensure discipline and unity of command :) But he also said that wages should reward the effort and employees should be treated fairly. I mean... not bad for its time, I guess.
November 9, 2025 at 12:01 PM
7. Henri Fayol (1918) thankfully focused on managers not employees. He said that managers should ensure discipline and unity of command :) But he also said that wages should reward the effort and employees should be treated fairly. I mean... not bad for its time, I guess.
6. Max Weber (1947) was like "how do we get rid of biases and favoritism?" and came up with "bureaucracy" - every organization is hierarchy of roles. Roles define behavior, not the other way around. He "solved" human biases by removing humans from the equation.
November 9, 2025 at 12:01 PM
6. Max Weber (1947) was like "how do we get rid of biases and favoritism?" and came up with "bureaucracy" - every organization is hierarchy of roles. Roles define behavior, not the other way around. He "solved" human biases by removing humans from the equation.
5. Frederick Taylor (1911) was obsessed with efficiency and experiments like "what height should scaffold be so that bricklayers work faster?" He called it "scientific management" but it was more of an engineering. Taylorism is still used today in places like McDonalds.
November 9, 2025 at 12:01 PM
5. Frederick Taylor (1911) was obsessed with efficiency and experiments like "what height should scaffold be so that bricklayers work faster?" He called it "scientific management" but it was more of an engineering. Taylorism is still used today in places like McDonalds.
4. But the real origins of the field start in the late 19th and early 20th century with the "classical" theories of organization. #organization
November 9, 2025 at 12:01 PM
4. But the real origins of the field start in the late 19th and early 20th century with the "classical" theories of organization. #organization
3. Turns out, this doesn't just magically happen - organizations actively make an effort to align the individual behavior to achieve organizational objectives. Researchers have been tackling this forever, even tracing back to Adam Smith's "productive powers of labour".
November 9, 2025 at 12:01 PM
3. Turns out, this doesn't just magically happen - organizations actively make an effort to align the individual behavior to achieve organizational objectives. Researchers have been tackling this forever, even tracing back to Adam Smith's "productive powers of labour".
2. Within organizations we observe non-market relationships - we see hierarchy/team work/cooperation but without price as a coordinating mechanism. But then why would anyone make any effort? Why isn't free-riding a default behavior for every employee?
November 9, 2025 at 12:01 PM
2. Within organizations we observe non-market relationships - we see hierarchy/team work/cooperation but without price as a coordinating mechanism. But then why would anyone make any effort? Why isn't free-riding a default behavior for every employee?