Does complexity belong inside the firm, or out?

Fred Phillips

Economic Research-Ekonomska Istraživanja, 2020, vol. 33, issue 1, 2397-2409

Abstract: This theoretical article presents evidence that companies choose to impose complexity on their customers, rather than comprehend system complexity internally. It argues that externalising complexity in this manner is fundamentally different from the externalisation of costs and risks as usually described in the literature, because its impact is on the customer’s attention, rather than (just) on the customer’s wallet or health. Attention is a limited resource. Thus, exporting complexity should reduce the buyer base, leaving only the buyer segment that will tolerate the drain on their attention. It does not seem to be a tactic that is viable for the long run.

Date: 2020
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DOI: 10.1080/1331677X.2019.1625796

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