On the Design of Hierarchies: Coordination Versus Specialization

Oliver Hart and John Moore

Scholarly Articles from Harvard University Department of Economics

Abstract: We consider an economy that has to decide how assets are to be used. Agents have ideas, but these ideas conflict. We suppose that decision†making authority is determined by hierarchy: each asset has a chain of command, and the most senior person with an idea exercises authority. We analyze the optimal hierarchical structure given that some agents coordinate and other specialize. Among other things, our theory explains why coordinators should typically be senior to specialists and why pyramidal hierarchies may be optimal. Our theory also throws light on the optimal degree of decentralization inside a firm and on firm boundaries.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (151)

Published in Journal of Political Economy -Chicago-

Downloads: (external link)
http://dash.harvard.edu/bitstream/handle/1/3448676/Hart_OnDesign.pdf (application/pdf)

Related works:
Journal Article: On the Design of Hierarchies: Coordination versus Specialization (2005)
Working Paper: On the Design of Hierarchies: Coordination versus Specialization (2005)
Working Paper: On the Design of Hierarchies: Coordination Versus Specialization (1999)
Working Paper: On the design of hierarchies: coordination versus specialization (1999)
Working Paper: On the Design of Hierarchies: Coordination Versus Specialization (1999)
Working Paper: On the Design of Hierarchies: Coordination Versus Specialization (1999)
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:hrv:faseco:3448676

Access Statistics for this paper

More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Office for Scholarly Communication ().