Behaviour and the Organization of the Firm
AbstractIn this paper a new way of distinguishing between cooperative and non-cooperative organizations is introduced. This distinction is based on well-known solution concepts and is applied to the problem of organizing production teams in a firm. Our first results demonstrates that income-sharing cooperative firms are not necessarily inefficient as suggested in the work of Alchian and Demsetz (1972) and Holmstrom (1982). Secondly, it is shown that if a capitalist firm is interpreted as a non-cooperative organization, then it must be less efficient than corresponding cooperative organizations due to the additional monitoring of workers needed to stop shirking.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 648.
Length: 20 pages
Date of creation: 1986
Date of revision:
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- Dow, Gregory K. & Putterman, Louis, 2000. "Why capital suppliers (usually) hire workers: what we know and what we need to know," Journal of Economic Behavior & Organization, Elsevier, vol. 43(3), pages 319-336, November.
- W. Bentley MacLeod, 2013. "On Economics: A Review of Why Nations Fail by D. Acemoglu and J. Robinson and Pillars of Prosperity by T. Besley and T. Persson," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 116-43, March.
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