Mission of Research Centre of Increasing Returns and Economic Organization

January 2003

(A) The aim of this centre is to resurrect the spirit of classical economic thinking on network effects of division of labor and general equilibrium mechanisms that simultaneously determine interdependent benefits of specialization and number of participants in the network of division of labor (extent of the market) in a modern body of inframarginal economics. Inframarginal economics applies inframarginal analysis (nonclassical mathematical programming that allows corner solutions) to studies of network effects of division of labor, individuals’ networking decisions in choosing their levels of specialization, mechanisms that endogenously determine network size and pattern of division of labor, increasing returns, and relationships between transaction costs, evolution in institutions, property rights, contracts, organization, and the network size and patterns of division of labor. Here, inframarginal analysis is total cost-benefit analysis across different network patterns of trade and division of labor in addition to marginal analysis of resource allocation for a given pattern of organization. It includes linear and nonlinear programming, mixed integer programming, dynamic programming, control theory, and other forms of non-classical mathematical programming. This centre achieves this aim via cooperation with the Society of Inframarginal Economics and by publishing Journal of Inframarginal Economics and book series on increasing returns and economic organization and managing website: www.inframarginal.com

(B) This centre publishes research findings in pure theory, applied theory, empirical studies, and policy and business application with one or several of the following features. It publishes a referred journal Division of Labor and Transaction Costs – A Journal of Society of Inframarginal Economics, a book series on increasing returns and economic organization, and circulates information on research findings in website www.inframarginal.com. The journal program and book series program are run via a comprehensive publication contract with World Scientific Publishing Co.
(1) This centre publishes research results, via its referred journal and book series, that apply inframarginal analysis to economic problems. It is particularly interested in research that explores the general equilibrium implications of inframarginal analysis. This centre does not conduct research that is confined to the marginal analysis of interior solutions.
(2) Since the networking decision is an important type of inframarginal decisions, this centre is interested in publishing inframarginal analysis of the networking decision and of general equilibrium implications of networking decisions. This centre is not confined to research of strategic networking decisions. Rather, it is particularly interested in the research of the impersonal networking decisions. This centre does not publish papers that are confined to marginal analysis of resource allocation for a given network pattern of trade and division of labor. This centre is particularly interested in research of endogenous specialization and endogenous network pattern of division of labor based on impersonal networking decisions.
(3) This centre is particularly interested in inframarginal analysis of various phenomena generated by network effects of division of labor and general increasing returns. This centre is not confined to research of economies of scale of the firm. It is also interested in network effects of division of labor that exist even when economies of scale are absent. This centre is particularly interested in the inframarginal analysis of various networking phenomena in new economy and e-business.
(4) This centre publishes inframarginal analysis of exogenous and endogenous transaction costs, and related institutions and structures of property rights and contracts. Here, exogenous transaction costs are costs incurred in transactions that can be seen before individuals have made their decisions, while endogenous transaction costs are distortions (departure of equilibrium from the Pareto optimum) caused by interest conflicts and interactions between decisions. This centre is particularly interested in the research of the interplay between various transaction costs and the network size and patterns of division of labor.
(5) Despite the fact that inframarginal economics is very mainstream in the sense that it applies mathematical programming to study self-interested behavior and uses the concept of (static or dynamic) general equilibrium to investigate the outcome of interactions between decisions, bounded rationality, entrepreneurial discovery, fundamental uncertainty, and evolution in division of labor, institutions, and organisms, non-mainstream approach and methodology, which are not based on optimization and equilibrium, will be seriously considered as long as it can stand the test of logical consistency and/or empirical evidence.

(C) This centre promotes and supports teaching and training programs of inframarginal economics. It organizes an annual training program to systematically teach inframarginal economics. Certificates will be issued to those attendants who have acquired qualifications for teaching inframarginal economics. It designs and runs core curriculum of inframarginal economics and master and Ph.D. programs of inframarginal economics. The centre will develop various joint teaching and training programs with other tertial education and research institutions on inframarginal economics. It will play a role as an international teaching and training centre of inframarginal economics to meet worldwide demand for teachers and professionals in inframarginal revolution in economics. This centre, via book series of increasing returns and economic organization, publishes a comprehensive textbook series of inframarginal economics at graduate and undergraduate levels. This textbook series covers principles of economics, trade theory, development economics, industrial organization, economics of property rights and transaction costs, and other fields that apply inframarginal economics. The centre will organize international conferences on inframarginal economics and publish conference proceedings biannually. The centre publishes readings and collections of papers on inframarginal economics via book series program.

(D) This centre promotes and supports business and policy consulting that applies inframarginal economics, in cooperation wit the Society of Inframarginal Economics and other institutions.

Inframarginal Economics Society www.inframarginal.com