The Dynamics of Organizational Learning

Bernardo A. Huberman
Dynamics of Computation Group
Xerox Palo Alto Research Center
Palo Alto, CA 94304
huberman@parc.xerox.com




Abstract

This paper presents a dynamical theory of organizational learning that explicitly accounts for both the introduction of new routines into the manufacturing process and improvements in the selection of which procedures to follow. Besides producing a power law of organizational learning with a rate that depends on the effectiveness of the decision procedure, the theory also accounts for observed anomalies characterized by price increases with cumulative output.
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