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Allocative efficiency

In: Organization in the Economic Firm

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Abstract

Chapter 13 studies the allocative efficiency, referred to as "internal Pareto optimality," that is associated with the allocation of activities chosen by employees and restrictions imposed by supervisors on subordinates. It is demonstrated that if all employees are incentive motivated, vertically influenced, or internalize the values of the firm, then the allocation that obtains is internally Pareto optimal.

Suggested Citation

  • ., 2021. "Allocative efficiency," Chapters, in: Organization in the Economic Firm, chapter 13, pages 179-185, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20866_13
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    Keywords

    Economics and Finance;

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