The O‐ring theory of the firm

We develop an O‐ring production function characterized by specialization and division of labor and where shirking or negative shocks can have major adverse consequences. We show that when the principal can monitor individual output, the firm tends be large (potentially larger than first best), with...

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Bibliographische Detailangaben

Veröffentlicht in:	Journal of economics & management strategy 2018-03, Vol.27 (1), p.82-101
1. Verfasser:	Rauh, Michael T.
Format:	Artikel
Sprache:	eng
Schlagworte:	Division of labor Economic models Incentives Industrial production Low pay Moral hazard Specialization Teams
Online-Zugang:	Volltext
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