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The growing literature on complementarities has drawn attention to how the effects of different organizational structures, practices, and institutions are interdependent. Rather than one best way of organizing, complementarities suggest that the effectiveness of one organizational element may be dependent on the presence or absence of another particular element. Consequently, organizational arrangements often display “multiple equilibria” or what is known as equifinality, whereby multiple pathways may lead to the same or similar outcomes. While being a source of theoretical innovation, the configurational nature of complementarities has posed a number of challenges. This chapter reviews the emerging literature on complementarities to identify a series of conceptual challenges related to understanding complementarities as organizational configurations, and examines the methodological challenges in studying how such elements combine to produce joint effects on performance. The chapter argues that new set-theoretic methods using Qualitative Comparative Analysis (QCA) may present a very useful methodological alternative to studying complementarities. The chapter illustrates this potential by re-analyzing past work by Aoki, Jackson, and Miyajima (2007) on relationships between ownership structure, board structure, and employment practices of listed firms in Japan to show evidence of complementarities associated with hybrid configurations that combine market and relational forms of organization.

In the context of worker–firm complementarities, the extant literature has focused primarily on worker–firm dyads that generate additional revenue for the firm. However, we extend the study of worker–firm complementarities by examining matches that create value through the generation of additional nonpecuniary utility for employees. Through this lens, we hypothesize that mobile employees will receive lower wages to offset the benefits they receive from these nonpecuniary complementarities. Further, we hypothesize that star employees who create unique revenue-generating complementarities receive higher wages than otherwise predicted as they can capture a share of the additional revenue they generate. We test this conceptualization using panel data on all US National Basketball Association players from 2000 to 2009. We demonstrate that NBA players accept lower than predicted wages to play for their home teams which reflects worker utility-generating complementarities. We also show that superstars receive higher than predicted wages to play for their home teams, consistent with firm revenue-generating complementarities.

Estimating parameters of constrained optimization models in a consistent way requires a different set of methods than what is available in a typical econometric toolkit. We identify three complications likely to arise in this context, and suggest solutions to those complications: (i) the bi-level programming character, (ii) ill-posedness, and (iii) derivation of estimator properties. The solutions suggested involve a combination of numerical techniques and utilization of out-of-sample information through Bayesian techniques. The proposed framework is also suitable for typical empirical problems arising in trade analysis such as the estimation of trade equilibrium models and data balancing exercises.

This chapter reconstructs the roots of configurational analysis in organization theory and organizational economics, focusing on the elements of configurational thinking that are particularly relevant to organizational design; and outlining some future prospects for a configurational theory of organization design. We detect the presence of configurational ideas in many organization theories and organizational economics approaches. We argue that this, seldom acknowledged, continuity extends and enriches the implications of configurational analysis for organization design. In addition, we define and identify ‘structural heterogeneity’ as an organizational property that can be distinctively studied by configurational analysis, distinguishing between internal heterogeneity – diversity of organizational attributes within one configuration – and external heterogeneity – diversity of organizational configurations under the same environmental conditions. Some of the insights that can be gained through a configurational analysis of structural heterogeneity are illustrated through a fs/QCA study of a multi-industry sample of firms.

This chapter explores a descriptive theory of multidimensional travel behaviour, estimation of quantitative models and demonstration in an agent-based microsimulation.

A descriptive theory on multidimensional travel behaviour is conceptualised. It theorizes multidimensional knowledge updating, search start/stopping criteria and search/decision heuristics. These components are formulated or empirically modelled and integrated in a unified and coherent approach.

The theory is supported by empirical observations and the derived quantitative models are tested by an agent-based simulation on a demonstration network.

Based on artificially intelligent agents, learning and search theory and bounded rationality, this chapter makes an effort to embed a sound theoretical foundation for the computational process approach and agent-based micro-simulations. A pertinent new theory is proposed with experimental observations and estimations to demonstrate agents with systematic deviations from the rationality paradigm. Procedural and multidimensional decision-making are modelled. The numerical experiment highlights the capabilities of the proposed theory in estimating rich behavioural dynamics.

This contribution discusses a continuum model of large discrete networks in planar domains. For this model, the Kirchhoff law, boundary conditions and capacity constraints lead in a system optimisation approach to a infinite dimensional constrained optimisation problem and to “mixed” variational inequalities. Mixed finite element methods can be formulated for these variational inequalities such that computable discretizations of the continuum problem are obtained.