Large companies are usually organized into business units, yet some activitiesare almost always centralized in a company-wide functional unit. We firstshow that organizations endogenously create an incentive conflict between functionalmanagers (who desire excessive standardization) and...

When should expertise be shared in markets and when in …firms? Knowl-edge exchanges in the market involve less information about the quality ofthe provider's expertise, but facilitate good utilization of experts knowledge.In a …rm, management holds soft information about individuals...

Changes in information and communication technologieshave increased the offshorability of tasks.As routine tasks (Pol Antràs, Luis Garicano and EstebanRossi-Hansberg, 2006) and lower offshoring-costtasks (Gene Grossman and Esteban Rossi-Hansberg,2008) move abroad, production processes become...

This paper uses confidential microdata from the Census of Services to examine lawfirms' field boundaries. We find that the share of lawyers working in field-specializedfirms increases as market size increases and lawyers field-specialize, indicating thattransaction costs among lawyers, and not...

Empirical studies on information communication technologies (ICT) typically aggregate the“information” and “communication” components together. We show theoretically and empirically thatthese have very different effects on the empowerment of employees, and by extension on wageinequality....

Hierarchies allow individuals to leverage their knowledge through others` time.This mechanism increases productivity and ampli…fies the impact of skill heterogeneity on earnings inequality. To quantify this effect, we analyze the earnings andorganization of U.S. lawyers and use an equilibrium...

Earnings inequality has increased substantially since the 1970s. Using evidence changes from con…dential Census data on U.S. law offices on lawyers'organization and earnings, we study the extent to which the mechanism suggested by Lucas (1978) and Rosen (1982), a scale of operations effect...