Building Better Frameworks to Study Market Behavior
Dean Nicole Woolsey Biggart recently presented her research on market regimes at the Conference on Capitalism and Entrepreneurship hosted by Cornell University’s Center for the Study of Economy and Society. The two-day conference last September featured world renowned researchers and experts in economics and sociology from universities in Denmark, Sweden, France and the U.S.
Biggart presented a paper titled “Markets as Regimes: Explaining Change and Stability, Competition and Consensus in Economic Orders,” which she co-authored with Associate Professor Thomas D. Beamish of the UC Davis Department of Sociology. Biggart opened her presentation by describing how sociologists view market behavior primarily by using one of three explanatory frameworks: ecological, network, and cultural-institutional theories. She explained that the tendency among researchers is to rely on one theoretical framework over the others. Biggart and Beamish contend that this is an unnecessary approach.
According to Biggart, the solution to a problem of theoretical multiplicity is to develop the notion of market regimes, a concept that builds on the strengths of each theoretical approach as well as filling in unresolved gaps left by one or the other. As a case study, Biggart and Beamish examined the commercial construction industry, one of the United States’ largest and oldest market-based-industries.
By examining the historical transformation of this industry over two centuries, they found evidence of ecological, network and institutional forces. Biggart argues that the logic described by each theoretical framework helps explain three distinct market transformations that have occurred in this market-based industry over time. The key to her presentation was that no single theoretical framework can explain these changes alone and that integration is the key to a complete explanation of change and stability, competition and consensus in any market context.