Back to Inertia: Theoretical Implications of Alternative Styles of Logical Formalization

This article applies two new criteria, desirability and faithfulness, to evaluate Péli et al.'s (1994) formalization of Hannan and Freeman's structural inertia argument (1984, 1989). We conclude that this formalization fails to meet these criteria. We argue that part of the rational reconstruction on which this formalization builds does not reflect well the substantive argument in translating the natural language theory into logic. We propose two alternative formalizations that meet both of these criteria. Moreover, both derive the inertia theorem from much weaker, so much less constraining, premises. While both new formalizations draw information only from the original statement of the inertia theory, they reflect two different interpretations of inertia accumulation.
The two new formalizations are compatible with some recent theory extensions in organizational ecology. However, they lead to substantially different consequences when additional sociological considerations are added to their premise sets. The interplay between logical formalization and sociological content is highlighted using the example of Stinchcombe's (1965) liability-of-newness theorem. Even modest extensions of the proposed models lead to contrary implications about the age dependence in organizational mortality rates. Even faithful logical formalizations of arguments ordinarily involve implicit theory building.