Networks in Transition

Abstract

Abstract. This paper presents a model for networks in transition from a planned economy to a market economy. The idea is advanced that a movement from one type of network logic to another type is taking place. Three parallel movements can be observed. First, the hierarchical planning, which characterises the planned networks, is during the transition undergoing a period where firms ’ plans in the beginning are colliding. However, subsequently the firms are assumed to try to match their plans and as a result a network characterised by decentralised mutual planning emerges. Second, the static nature of the networks in the planned economy is concurrently undergoing a turbulent phase during the transition period, before the networks become stable. Finally, as market networks gradually replace the transition networks, firms develop an identity in the network and thereby leaving the state of anonymity, which prevails in the planned networks. Discovery is advanced as the driving factor in the third movement from anonymity to identify. Key words. Plans, transition, markets, networks, relationships.