An organization is a collection of agents that interact and produce some form of output. Formal organizations - such as corporations and governments - are typically constructed for an explicit purpose though this purpose needn’t be shared by all organizational members. An entrepreneur who...

Organization design is a major factor determining an organization's performance and how the people work together in these organizations. In the paper, we argue that designing organizations should be scientific-based and forward-looking. This raises challenges in designing organizations in...

This paper studies the issue of designing an optimal organizational form: design for sub-units' task allocation, decision-making structure, and incentive schemes for organizational members. Depending on the way tasks are allocated between the sub-units, and whether decision-making is centralized...

Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that reciprocal motivations and explicit performance-based...

We examine the implementation of efficient decisions about accepting a special order with asymmetric information by means of a dual transfer pricing mechanism based on Ronen and McKinney (1970). The model is designed in a simple fashion, two vertically related divisions within a firm...

We develop a theory of organization design in which the firm's structure is chosen to mitigate moral hazard problems in the selection and the implementation of projects. For a given set of projects, the 'divisional structure' which gives each agent the full responsibility over a subset of...

This paper presents a critical overview of some recent attempts at building formal models of organizations as information-processing and problem-solving entities. We distinguish between two classes of models according to the different objects of analysis. The first class includes models mainly...

Aufbauend auf der These einer zunehmenden Vermarktlichung von Beschäftigungsverhältnissen und des Endes der Organisationsgesellschaft von Davis (2009a, 2009b) untersuchen wir den Wandel der Industrienation Deutschland zur Dienstleistungs- und Wissensgesellschaft und fragen, ob mit diesem...

The standard Walrasian equilibrium theory requires that the marginal value product of production factor such as labor is equal across firms and industries. However, productivity dispersion is widely observed in the real economy. Search theory allegedly fills this gap by encompassing apparent...