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Obtaining information by diversifying projects or why specialization is inefficient

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Author Info
Amihai Glazer
Stef Proost

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Abstract

We examine how diversification of projects assigned to an agency can enhance efficiency by informing a principal of the agency’s quality. Projects that appear inefficient in isolation may be justified when assigned to the same agency. Assigning different tasks to different special purpose governments, though allowing for technical efficiency in the management of each project, may nevertheless reduce overall efficiency.

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File URL: http://www.econ.kuleuven.be/eng/ew/discussionpapers/Dps08/Dps0815.pdf
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Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0815.

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Date of creation: Jun 2008
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Handle: RePEc:ete:ceswps:ces0815

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Related research
Keywords: Special purpose governments; Asymmetric information; Bureaucracy; Project evaluation;

Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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This page was last updated on 2009-11-26.

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