Coordination Costs, Market Size, and the Choice of Technology

Haiwen Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: Impact of coordination costs and market size on a firm’s choice of technology is studied in a general equilibrium model in which firms engage in oligopolistic competition. A firm establishes an organizational hierarchy to coordinate its production. First, it is shown that an increase in market size leads a firm to choose a more specialized technology. Second, surprisingly, a robust result is that an increase in the level of coordination efficiency leads a firm to choose a less specialized technology.

Keywords: Division of labor; coordination efficiency; technology choice; hierarchy; market size (search for similar items in EconPapers)
JEL-codes: D43 L13 O14 (search for similar items in EconPapers)
Date: 2017-12-05
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Related works:
Journal Article: Coordination Costs, Market Size, and the Choice of Technology (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:83161

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