Organizational design with a budget constraint
AbstractIn 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.
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Bibliographic InfoArticle provided by Springer in its journal Review of Economic Design.
Volume (Year): 3 (1998)
Issue (Month): 2 ()
Note: Received: 5 November 1995 / Accepted: 18 September 1997
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- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
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- 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.
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