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Organizational Fixed Costs and Organizational Structure


  • Benjamin E. Hermalin

    (University of California at Berkeley)


This paper shows how fixed costs can play an important role in determining the structure of organizations. Applications considered include layoffs, downsizing, heterogeneity among firms, and the structure of hierarchies. Agency problems as a source of fixed costs are also considered.

Suggested Citation

  • Benjamin E. Hermalin, 1996. "Organizational Fixed Costs and Organizational Structure," Industrial Organization 9610002, EconWPA.
  • Handle: RePEc:wpa:wuwpio:9610002
    Note: Type of Document - Postscript/PDF; prepared on IBM PC ; to print on Postscript/Any; pages: 22 ; figures: included

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    More about this item


    fixed costs; organizational structure;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights


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