Technological choice under organizational diseconomies of scale

Anja Schöttner and Bruno Deffains

No 2006-028, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: With adverse selection, diseconomies of scale associated with hierarchies may induce the implementation of a second-best technology. This occurs whenever rents to lower tiers of the hierarchy increase faster than total surplus. This is more likely with longer hierarchies.

Keywords: Adverse Selection; Hierarchies; Technology (search for similar items in EconPapers)
JEL-codes: D82 L23 O33 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb649:sfb649dp2006-028

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