IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v3y1998i2p149-157.html
   My bibliography  Save this article

Organizational design with a budget constraint

Author

Listed:
  • Hans Gersbach

    (Alfred Weber-Institut, UniversitÄt Heidelberg, Grabengasse 14, D-69117 Heidelberg, Germany)

  • Uwe Wehrspohn

    (Alfred Weber-Institut, UniversitÄt Heidelberg, Grabengasse 14, D-69117 Heidelberg, Germany)

Abstract

In this paper we point out that the presence of the budget constraint substantially affects the relative performance of organizational decision rules. For instance, if there are only two types of projects to decide upon, the hierarchy always performs better than the polyarchy. The same result holds for any distribution of the quality of projects. We also illustrate that optimal mechanisms for variable evaluation costs involve stopping rules which look hierarchical, but avoid costly duplication as in hierarchies or polyarchies.

Suggested Citation

  • Hans Gersbach & Uwe Wehrspohn, 1998. "Organizational design with a budget constraint," Review of Economic Design, Springer;Society for Economic Design, vol. 3(2), pages 149-157.
    • Handle: RePEc:spr:reecde:v:3:y:1998:i:2:p:149-157
    Note: Received: 5 November 1995 / Accepted: 18 September 1997
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/10058/papers/8003002/80030149.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted
    File URL: http://link.springer.de/link/service/journals/10058/papers/8003002/80030149.ps.gz
    Download Restriction: Access to the full text of the articles in this series is restricted
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter-J. Jost & Frauke Lammers, 2010. "Organization of Project Evaluation and Implementation under Moral Hazard," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(2), pages 212-238, June.
    2. Peter-J. Jost & Frauke Lammers, 2009. "The organization of project evaluation under competition," Review of Managerial Science, Springer, vol. 3(2), pages 141-155, July.
    3. Stephen J. DeCanio & Catherine Dibble & Keyvan Amir-Atefi, 2000. "The Importance of Organizational Structure for the Adoption of Innovations," Management Science, INFORMS, vol. 46(10), pages 1285-1299, October.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:3:y:1998:i:2:p:149-157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.