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| Tekijä: | Kerschbamer, R. Tournas, Y. |
| Otsikko: | In-house competition, organizational slack, and the business cycle |
| Lehti: | European Economic Review
2003 : JUN, VOL. 47:3, p. 505-520 |
| Asiasana: | Competition Organizational performance Uncertainty Supply and demand |
| Kieli: | eng |
| Tiivistelmä: | Multiplant firms pit their facilities against each other for production assignments. The author studies the consequences of this practice in a model where production is limited by capacity constraints and asymmetric information allows facilities to accumulate slack. It shows the amount of slack per unit of output to be pro-cyclical. Indeed, as capacity constraints become more acute in economic booms, the power of in-house competition for quota assignments is reduced and slack per unit of output increases, while the opposite is true in downturns. Moreover, in downturns firms may use higher cost facilities even when lower cost plants are not running at capacity since this boosts X-efficiency in low-cost plants. |
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