Organizational design with a budget constraint

Hans Gersbach and Uwe Wehrspohn
Additional contact information
Uwe Wehrspohn: Alfred Weber-Institut, UniversitÄt Heidelberg, Grabengasse 14, D-69117 Heidelberg, Germany

Review of Economic Design, 1998, vol. 3, issue 2, 149-157

Abstract: In this paper we point out that the presence of the budget constraint substantially affects the relative performance of organizational decision rules. For instance, if there are only two types of projects to decide upon, the hierarchy always performs better than the polyarchy. The same result holds for any distribution of the quality of projects. We also illustrate that optimal mechanisms for variable evaluation costs involve stopping rules which look hierarchical, but avoid costly duplication as in hierarchies or polyarchies.

JEL-codes: D23 L2 (search for similar items in EconPapers)
Date: 1998-03-13
Note: Received: 5 November 1995 / Accepted: 18 September 1997
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.de/link/service/journals/10058/papers/8003002/80030149.pdf (application/pdf)
http://link.springer.de/link/service/journals/1005 ... 03002/80030149.ps.gz (application/postscript)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reecde:v:3:y:1998:i:2:p:149-157

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().