17,140 research outputs found
Original and Derived Judgment An Entrepreneurial Theory of Economic Organization
Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other assets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees “proxy-entrepreneurs,” and ask how the firm’s organizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating performance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and destructive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the economic theory of the firm.Judgment, entrepreneur, delegation, employment relation, ownership
The Demand for Coordination
This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labor is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete `shifts' in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.
Valued Workflow Satisfiability Problem
A workflow is a collection of steps that must be executed in some specific
order to achieve an objective. A computerised workflow management system may
enforce authorisation policies and constraints, thereby restricting which users
can perform particular steps in a workflow. The existence of policies and
constraints may mean that a workflow is unsatisfiable, in the sense that it is
impossible to find an authorised user for each step in the workflow and satisfy
all constraints. In this paper, we consider the problem of finding the "least
bad" assignment of users to workflow steps by assigning a weight to each policy
and constraint violation. To this end, we introduce a framework for associating
costs with the violation of workflow policies and constraints and define the
\emph{valued workflow satisfiability problem} (Valued WSP), whose solution is
an assignment of steps to users of minimum cost. We establish the computational
complexity of Valued WSP with user-independent constraints and show that it is
fixed-parameter tractable. We then describe an algorithm for solving Valued WSP
with user-independent constraints and evaluate its performance, comparing it to
that of an off-the-shelf mixed integer programming package
Pricing and Welfare in Health Plan Choice
Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers. In the markets we observe, the welfare loss compared to the feasible efficient benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, we find substantial benefits from plan choice relative to single-insurer options.healthcare costs, health insurance, government-sponsered health insurance, employer-sponsored health insurance
Physical Database Design: A DSS Approach*
This paper presents a working decision support system for use in the physical design of a database. Physical database design, although a structured decision problem, lends itself to a decision support approach because closed form algorithms are computationally infeasible. The paper describes the physical database design problem, presents an overview of a software system for use in solving this problem, and evaluates the use of the system in solving a sample problem
Human Resource Management and Productivity
In this chapter we examine the relationship between Human Resource Management (HRM) and productivity. HRM includes incentive pay (individual and group) as well as many nonpay aspects of the employment relationship such as matching (hiring and firing) and work organization (e.g. teams, autonomy). We place HRM more generally within the literature on management practices and productivity. We start with some facts on levels and trends of both HRM and productivity and the main economic theories of HRM. We look at some of the determinants of HRM - risk, competition, ownership and regulation. The largest section analyses the impact of HRM on productivity emphasizing issues of methodology, data and results (from micro-econometric studies). We conclude briefly with suggestions of avenues for future frontier work.human resource management, productivity, personnel economics
The Institutions of Federalism: Toward an Analytical Framework
Mature federations have relatively transparent delineations of authority among levels of government; subnational governments enjoy considerable autonomy in their expenditure, revenue, and debt policies. In other countries, problems of soft budget constraints, bailouts, and fiscal and financial instability demonstrate the difficulties of institutional design in a federation. This paper outlines an analytical framework within which interjurisdictional spillovers may create incentives for higher-level governments to intervene in the control and financing of lower-level governments (bailouts). This framework helps to identify directions for theoretical and empirical research that can illuminate important features of observed institutions and guide policy analysis.federalism, bailouts, soft budget constraint, externalities
- …