Firm Organization and Market Structure: Centralization vs. Decentralization
نویسندگان
چکیده
The profitability of a firm is jointly determined by the market structure and the firm’s organizational structure. To explore the relationship between these two structures, a real-time information processing model in a dynamic duopoly environment is developed, which allows us to examine the effects of the product market competition and the cost of delay. It is found that Decentralization tends to outperform centralization when product market competition is intense due to the cost of delay associated with centralization. This result is supported by several empirical papers, such as Acemoglu et al. (2006) and Meagher and Wait (2006).
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