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Organizing multiple related tasks into jobs: Diversification vs. competition

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  • Baranchuk, Nina

Abstract

Agency models of multiple tasks typically assume independent outcomes. We show that correlation between outcomes can generate both economy and diseconomy of scale through diversification and competition effects. Additionally, the optimal compensation is non-monotone if the correlation is large.

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  • Baranchuk, Nina, 2008. "Organizing multiple related tasks into jobs: Diversification vs. competition," Economics Letters, Elsevier, vol. 99(3), pages 599-603, June.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:3:p:599-603
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    Cited by:

    1. Bourjade, Sylvain & Schindele, Ibolya, 2011. "The role of agency costs in financial conglomeration," MPRA Paper 34815, University Library of Munich, Germany.

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