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Information, Capital, and Organization

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  • Horning, Bruce C

Abstract

This paper examines on of the roles that information plays in the production process by looking at the information that firms collect about their workers. This information, concerning the worker's abilities, is used to improve the quality of job matches within the firm and reduce future production costs. This paper models this information as a capital good and shows how the existence of this capital good can be used to explain some of the residual firm value observed in equity markets as well as the rigidities observed when firms expand their scale.

Suggested Citation

  • Horning, Bruce C, 1995. "Information, Capital, and Organization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 263-275, March.
    • Handle: RePEc:spr:joecth:v:5:y:1995:i:2:p:263-75
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