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Abstract
We study how ownership structure and management objectives interact in determining the company size without assuming information constraints or any explicit costs of management. In symmetric agent economies, the optimal company size balances the returns to scale of the production function and the returns to collaboration efficiency. For a general class of payoff functions, we characterize the optimal company size, and we compare the optimal company size across different managerial objectives. We demonstrate the restrictiveness of common assumptions on effort aggregation (e.g., constant elasticity of effort substitution), and we show that common intuition (e.g., that corporate companies are more efficient and therefore will be larger than equal-share partnerships) might not hold in general.
Original language | English |
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Pages (from-to) | 337-366 |
Number of pages | 30 |
Journal | BE Journal of Theoretical Economics |
Volume | 16 |
Issue number | 1 |
Early online date | 17 Nov 2015 |
DOIs | |
Publication status | Published - 2016 |
Keywords
- team
- partnership
- effort complementarities
- firm size
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
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41st Annual Conference of EARIE
Popov, S. V. (Participant)
29 Aug 2014 → 31 Aug 2014Activity: Participating in or organising an event types › Participation in conference
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29th Annual Congress of the European Economic Association
Popov, S. V. (Participant)
25 Aug 2014 → 29 Aug 2014Activity: Participating in or organising an event types › Participation in conference
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Games and Networks
Popov, S. V. (Participant)
24 May 2014Activity: Participating in or organising an event types › Participation in workshop, seminar, course