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The Benefit and Cost of Winner Picking: Redistribution Vs Incentives
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This note points out the differences between conducting several projects within one big firm (common ownership) and conducting each project within an independent firm (separate ownership).
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The Benefit and Cost of Winner Picking: Redistribution Vs Incentives |AB| A multi-divisional firm can engage in "winner-picking" to redistribute scarce funds efficiently across divisions. But there is a conflict between rewarding winners (investing) and producing resources internally to reward...
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