Technological Choice under Organizational Diseconomies of Scale

Dominique Demougin () and Anja Schöttner

No SFB649DP2006-028, SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649

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)
New Economics Papers: this item is included in nep-bec, nep-ino and nep-mic
Date: 2006-04
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