Template-Type: ReDIF-Paper 1.0
Title: The Role of Competition for an X-Inefficient Organization
Author-Name: Ulrich Kamecke

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Abstract: The paper presents a manager controled firm which does not minimize 
 long run costs even though there is no moral hazard problem involved and the 
 mangager maximizes a profit depending salary. The inefficiency is caused by 
 competition in the job market since the manager uses some of his freedom 
 inside the firm to protect himself against rivals when he decides on matters 
 that affect the firm's profitability in the time after his salary is 
 renegotiated. The inefficiency is limited by competition in the output 
 market.
Series: Sonderforschungsbereich 303, University of Bonn, Germany

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Creation-Date: 1989-12
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Handle: RePEc:bon:bonsfa:265