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The Comparative Statics of Optimal Hierarchies†

The Comparative Statics of Optimal Hierarchies† AbstractSeveral classes of models of hierarchical organizations share two common properties: the characteristics at different levels of the hierarchy are complementary, but this complementarity does not extend beyond adjacent levels. We propose a unified yet simple approach to study comparative statics of organizational characteristics with endogenous number of hierarchical layers in all these models. We use this new approach to study organizational decision making, and show that increased delay cost incentivizes the organization to empower lower level employees more than upper level employees. (JEL D21, D23, L23, M10) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

The Comparative Statics of Optimal Hierarchies†

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Publisher
American Economic Association
Copyright
Copyright © 2019 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20170158
Publisher site
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Abstract

AbstractSeveral classes of models of hierarchical organizations share two common properties: the characteristics at different levels of the hierarchy are complementary, but this complementarity does not extend beyond adjacent levels. We propose a unified yet simple approach to study comparative statics of organizational characteristics with endogenous number of hierarchical layers in all these models. We use this new approach to study organizational decision making, and show that increased delay cost incentivizes the organization to empower lower level employees more than upper level employees. (JEL D21, D23, L23, M10)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: May 1, 2019

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