An organization will often use a specialized technical language that is un-derstood by its members but not by others. We develop a theory of optimalorganizational languages and identify a key trade-o¤ between facilitatinginternal communication and encouraging communication with other...

A large theoretical literature focuses on the question: What determines firms’ boundaries?Recently, Garicano and Santos and Holmstrom and Milgrom have proposed theories in whichfirms’ boundaries reflect the division of labor across individuals. This paper discussesstrategies for generating...