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dc.contributor.authorGibbons, Robert
dc.date.accessioned2011-10-28T17:31:07Z
dc.date.available2011-10-28T17:31:07Z
dc.date.issued2009-12
dc.identifier.urihttp://hdl.handle.net/1721.1/66678
dc.descriptionThis essay was originally drafted for the Nobel Symposium on "Foundations of Organization.” Even that incomplete original draft almost tripled the length constraint for the Annual Review, so this essay provides only an overview of the project.en_US
dc.description.abstractWhen economists have considered organizations, much attention has focused on the boundary of the firm, rather than its internal structures and processes. In contrast, this essay sketches three approaches to the economic theory of internal organization— one substantially developed, another rapidly emerging, and a third on the horizon. The first approach (pricing) applies Pigou’s prescription: if markets get prices wrong then the economist’s job is to fix the prices. The second approach (politics) considers environments where important actions inside organizations simply cannot be priced, so power and control become central. Finally, the third approach (path-dependence) complements the first two by shifting attention from the “between” variance to the “within.” That is, rather than ask how organizations confronting different circumstances should choose different structures and processes, the focus here is on how path-dependence can cause persistent performance differences among seemingly similar enterprises.en_US
dc.description.sponsorshipI benefited greatly from financial support during a Taussig Professorship at Harvard’s Economics Department and from the Program on Innovation in Markets and Organizations at MIT’s Sloan School.en_US
dc.language.isoen_USen_US
dc.publisherCambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technologyen_US
dc.relation.ispartofseriesMIT Sloan School of Management Working Paper;4777-10
dc.titleInside Organizations: Pricing, Politics, and Path Dependenceen_US
dc.typeWorking Paperen_US


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