Informational Economies of Scale
The theory of the firm under uncertainty is examined in the context of several examples which illustrate that opportunities to purchase technological information at some cost in resources may induce economies of scale even though the technology of physical production has no economies of scale. Better information justifies a higher scale of operations and vice versa. The two effects combined lead to an unbounded optimal scale of operations when information acquisition is adjusted optimally.
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Volume (Year): 6 (1975)
Issue (Month): 1 (Spring)
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