Optimal Organization: Centralization, Decentralization or Delegation?
نویسنده
چکیده
The paper addresses the issue of optimal organization of production. I compare three organizational forms: centralization (one agent produces different inputs), decentralization (each of two agents produces a different input and contracts directly with the principal), and delegation (two agents produce different inputs, the principal contracts only with one of them). The key issue in the comparison of these organizational forms is whether having more information about costs of production hurts or benefits an agent. I demonstrate that the answer to this question depends on the degree of substitutability/complementarity between the inputs. I also address the issue of collusion between agents in the decentralized organization and characterize conditions under which a stake of collusion exists. JEL Fields: D2, D82, L23
منابع مشابه
The Value of Information and Optimal Organization
The paper addresses the issue of optimal organization of production. I compare three organizational forms: centralization (one agent produces different inputs), decentralization (each of the two agents produces a different input and contracts directly with the principal), and delegation (two agents produce different inputs, the principal contracts with one of them only). The optimal organizatio...
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