The Multiple Institutional Logics of Innovation
How do decentralized systems deal with innovation? In particular, how do they aggregate the myriad experiences of their component parts, facilitate diffusion of information, and encourage investments in innovation? This is a classic problem in the study of human institutions. It is also one of the biggest challenges that exists in the governance of decentralized systems: How do institutions shape individual behavior around solving problems and sharing information in a fashion that is reasonably compatible with collective well-being? We use a particular decentralized institution (the U.S. House of Representatives), wrestling with a novel problem (how to utilize the Internet), to explore the implications of three archetypical principles for organizing collective problem solving: market, network, and hierarchy.