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RobinHanson's avatar

Yes, firms do rot.

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Tim Tyler's avatar

I don't have stats handy, but surely firms exhibit senescence too. Famously, the “ABCs of corporate senescence” are: "Arrogance, Bureaucracy and Complacency". Founders leave, secret sauces get lost or diluted. Why would organizations not exhibit senescence? Most of the same natural laws that make other complex systems age and die apply to them too. Here are some aging mechanisms that would seem to apply to corporations: * The reliability theory of aging; * The antagonistic pleiotropy theory of aging; * The pathogen theory of aging.

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