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Queues and Hierarchies

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  • A. W. Beggs

Abstract

This paper examines the optimal structure of hierarchies when workers differ in the range of tasks they can perform. A hierarchical system may reduce costs by allowing most tasks to be handled by unskilled workers. This may however increase delay for those tasks which must pass through several layers before reaching the appropriate level. The paper characterises an optimal hierarchy when such a trade-off exists.

Suggested Citation

  • A. W. Beggs, 2001. "Queues and Hierarchies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 297-322.
    • Handle: RePEc:oup:restud:v:68:y:2001:i:2:p:297-322.
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    File URL: http://hdl.handle.net/10.1111/1467-937X.00170
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    Cited by:

    1. Àlex Arenas & Antonio Cabrales & Leon Danon & Albert Díaz-Guilera & Roger Guimerà & Fernando Vega-Redondo, 2010. "Optimal information transmission in organizations: search and congestion," Review of Economic Design, Springer;Society for Economic Design, vol. 14(1), pages 75-93, March.
    2. Markus Reitzig & Boris Maciejovsky, 2015. "Corporate hierarchy and vertical information flow inside the firm—a behavioral view," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 1979-1999, December.
    3. Phillip J. Lederer & Xiaobo Zheng, 2021. "Can information economics explain the organization of productive facilities?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 525-553, August.
    4. Moritz Mosenhauer, 2022. "Salience and management‐by‐exception," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3685-3697, December.
    5. Cho, Myeonghwan, 2010. "Efficient structure of organization with heterogeneous workers," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1125-1139, November.
    6. René van den Brink & Robert P. Gilles, 2003. "Explicit and Latent Authority in Hierarchical Organizations," Tinbergen Institute Discussion Papers 03-102/1, Tinbergen Institute.
    7. Dimitri Vayanos, 2003. "The Decentralization of Information Processing in the Presence of Interactions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 667-695.
    8. Szu-Wen Chou, 2002. "Flattened Resource Allocation, Hierarch Design and the Boundaries of the Firm," Levine's Working Paper Archive 618897000000000056, David K. Levine.
    9. Cheng Chen & Wing Suen, "undated". "Delay Cost, Knowledge Hierarchy, and Wages," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-279, Boston University - Department of Economics.
    10. Enoch Hill & David Perez-Reyna, 2017. "Managing skill premium through firm structure," Documentos CEDE 15626, Universidad de los Andes, Facultad de Economía, CEDE.
    11. Andrea Patacconi, 2005. "Optimal Coordination in Hierarchies," Economics Series Working Papers 238, University of Oxford, Department of Economics.
    12. van den Brink, J.R. & Ruys, P.H.M., 2005. "Technological Change, Wages and Firm Size," Discussion Paper 2005-022, Tilburg University, Tilburg Law and Economic Center.
    13. Kirchmaier, Isadora, 2014. "Service Organizations: Customer Contact and Incentives of Knowledge Managers," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100418, Verein für Socialpolitik / German Economic Association.
    14. Benjamin Golub & R. McAfee, 2011. "Firms, queues, and coffee breaks: a flow model of corporate activity with delays," Review of Economic Design, Springer;Society for Economic Design, vol. 15(1), pages 59-89, March.
    15. Daron Acemoglu & Mohamed Mostagir & Asuman Ozdaglar, 2014. "Managing Innovation in a Crowd," NBER Working Papers 19852, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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