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Technological Choice under Organizational Diseconomies of Scale

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.
Year of publication:
2006
Authors: Demougin, Dominique ; Schöttner, Anja
Institutions: Sonderforschungsbereich Ökonomisches Risiko <Berlin>
Subject: Technologie | technology | Hierarchie | Adverse Selektion | Economies of scale | ECONOMIES OF SCALE
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  • 1. Introduction
  • 2. The model
  • 3. The two-tier hierarchy
  • 4. The multi-tier hierarchy - an example
  • 5. Conclusion
  • 6. Appendix
Persistent link: https://www.econbiz.de/10005857930
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