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The dynamics of resource allocation in research organizations

  • Filson, Darren

As a first step towards understanding the evolution of small groups in firms, this paper develops and tests a simple decision-theoretical model of research-unit evolution in which, as managers resolve their uncertainty over time, they shut down under-performing units and remove under-performing unit heads. The selection process generates several testable hypotheses about how unit and head characteristics affect the assignment of heads to units and resource allocation within the firm. Data on research units in firms is used to test the model and estimate the relative importance of the different effects on resource allocation.

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File URL: http://www.sciencedirect.com/science/article/B6V8F-414WX55-6/2/abb6258a115140766887e1520d5b6e6b
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 43 (2000)
Issue (Month): 2 (October)
Pages: 263-277

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Handle: RePEc:eee:jeborg:v:43:y:2000:i:2:p:263-277
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. Bentley MacLeod & James M. Malcomson, 1985. "Reputation and Hierarchy in Dynamic Models of Employment," Working Papers 628, Queen's University, Department of Economics.
  2. Aghion, P. & Tirole, J., 1993. "On the Management of Innovation," Working papers 93-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Aghion, Philippe & Tirole, Jean, 1994. "Opening the black box of innovation," European Economic Review, Elsevier, vol. 38(3-4), pages 701-710, April.
  4. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
  5. Milton Harris & Bengt Holmstrom, 1981. "A Theory of Wage Dynamics," Discussion Papers 488, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Aghion, Philippe & Tirole, Jean, 1995. "Some implications of growth for organizational form and ownership structure," European Economic Review, Elsevier, vol. 39(3-4), pages 440-455, April.
  7. Aghion, Philippe & Tirole, Jean, 1994. "The Management of Innovation," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 1185-1209, November.
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