The Organization of Markets

The term organization has earlier been used in the context of markets, but what is missing from current literature is a more systematic analysis of this notion. We present an analysis of partial organization that provides a theoretical framework for the discussions in the remaining chapters. Organization is described as a decided order where the most fundamental decisions are about membership, rules, monitoring, sanctions, and hierarchy. We exemplify how these ‘organizational elements’ are common in contemporary markets—not only in markets within formal organizations such as exchanges, but also in the more common form of markets described in the book, markets outside formal organizations. We demonstrate that a decided order has specific characteristics that make it salient to distinguish it from orders emerging from mutual adaptation among market actors and from institutions in markets.