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A HIERARCHICAL THEORY OF THE FIRM *
Author(s) -
SANDLER TODD,
CAULEY JON
Publication year - 1980
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.1980.tb00554.x
Subject(s) - multilevel model , economics , computer science , econometrics , theory of the firm , mathematical economics , hierarchical database model , operations research , mathematical optimization , microeconomics , mathematics , data mining , machine learning
Summary This paper provides a mathematically coherent and concise formulation of the Williamson market‐failure approach and, hence, develops models for single‐level and multilevel firms and organizations. These models optimally determine the extent of integration for each viable link on every hierarchical level, When the models are reformulated in terms of four operational parameters that determine integration, applied benefit‐cost methods can be utilized, in practice, to model a firm. Both static and dynamiclmodels‐are presented.