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Technological choice under organizational diseconomies of scale

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  • Schöttner, Anja
  • Deffains, Bruno

Abstract

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.

Suggested Citation

  • Schöttner, Anja & Deffains, Bruno, 2006. "Technological choice under organizational diseconomies of scale," SFB 649 Discussion Papers 2006-028, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2006-028
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Adverse Selection; Hierarchies; Technology;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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