| Characterized as the industrialization of agriculture, agricultural markets have undergone structural changes from commodity market exchanges to increasingly vertically coordinated market arrangements (i.e. supply chains). In spite of the significant welfare implications of such changes in market structure (Boehlje, 1999), existing research on the study of changes in market institutions is incomplete with respect to explaining the dynamic processes that give rise to such large change events (Scott, 1995).; As a result, the purpose of this dissertation is to extend institutional theories (DiMaggio and Powell, 1983; Scott, 1995; Dorfman et al., 1963) by explaining the factors and processes that give rise to changes in market institutions. The U.S soybean industry is used as an example to highlight potential change events.; In drawing on the tenets of Austrian economics (Hayek, 1967, 1978; Kirzner, 1979; Lachmann, 1977) and complexity sciences (Kaufmann, 1993,1995; Prigonine and Stengers, 1984), a theoretical framework of institutional change is developed. Changes in market institutions are fundamentally attributed to the process in which knowledge is created, disseminated and diffused through the collective behavior of subjective and alert entrepreneurial agents. Given complementarity influences, such a process gives rise to incremental, as well as punctuated, structural changes in markets institutions. Such a depiction of institutional change processes highlights the importance of a "circular causative" logic in which micro entrepreneurial and macro institutional forces jointly shape an open and unpredictable evolution of market institutions.; This theoretical framework is then employed with a unique agent-based simulation approach (Axelrod, 1997). The results from this simulation approach demonstrate the co-evolution of simulated entrepreneurial behaviors and change processes in institutional environments (U.S soybean sector). The results are generally consistent with the theoretical framework proposed. However, there are also unexpected insightful results obtained from this simulation analysis, with dynamic tension between existing commodity institutions and vertically coordinated institutions. Large structural changes were obtained towards vertically coordinated market structures. However, increasing contract premiums in these market structures were not a decisive influence in such change events. Other influences such as the complementarity of capital resources, density of entrepreneurial populations and interstage information flows were important explanatory factors in change towards vertically coordinated market structures.; However, in spite of the theoretical and methodological contributions of this research, there are a number of limitations. One such limitation stems from the computational and memory constraints imposed by the Mathematica programming software. In addition, model validation and verification procedures were difficult to implement given the inherent nature of the agent-based approach. |
