Tuesday, July 6, 2010

Organizational Economy

In Freefall, Stiglitz mentions the research of Herbert Simon arguing that there is no reason for profit enterprises should be any more efficient than non-profit or government organizations given neo-classical assumptions. This is because most people are employees no matter what the organization is, and so there is no difference in motivation. Furthermore, in public companies, the owners are the shareholders, who are very removed from management.

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