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econ 308 small deck


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lack of balance
Middle ground in decision making, between total assent and total disagreement. Consensus depends on participants having shared values and goals, and on having broad agreement on specific issues and overall direction. Consensus implies that everyone accepts and supports the decision, and understands the reasons for making it. See also collective responsibility.
Inducement or supplemental reward that serves as a motivational device for a desired action or behavior
economies of scale and scope
Reduction in long-run average and marginal costs, due to increase in size of an operating unit (a factory or plant, for example). Economics of scale can be internal to a firm (cost reduction due to technological and management factors) or external (cost reduction due to the effect of technology in an industry). See also diseconomies of scale. Of scope= Reduction in long-run average and marginal costs, due to the production of similar or related goods or services where the output or provision of an item 'A' reduces the cost of item 'B.' See also economies of scale.
not completely satisfied
Coase Theorem
Concept that economic efficiency is achieved best by full allocation of, and completely free trade in, property rights. It states that what really matters is that everything is owned by someone and that, initially, who owns what doesn't matter. Based on two main ideas—freedom of individual choice, and zero transaction costs (expenses associated with the process of buying and selling)—it helps explain the unprecedented cost advantage online firms will have in the digital marketplace (where transaction costs are approaching zero) over the traditional firms. It has several other applications, such as in who pays for the pollution costs. Proposed by the US-based Nobel laureate economist Ronald H. Coase (1910-) in his 1960 paper 'The Problem Of Social Cost
Common Pool Problem
In economics, a common-pool resource (CPR), alternatively termed a common property resource, is a particular type of good consisting of a natural or human-made resource system, the size or characteristics of which makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Wetware= The human nervous system, as opposed to computer hardware or software peoples ideas. and software=general knowledge such as formulas
is identifying the best firm in an industry or the best business unit in a firm and imitating it.
Specific assets
are assets that are worth more in their current use than in alternative uses.
Organizational architecture
Organizational architecture is an important set of constraints and incentives to limit or resolve incentive conflicts and a risk sharing plan
Adverse selection
is the tendency of an indicidual with superior information over a potential trading partner to extend an offer that would be detrimental to that trading partner.
Solutions to implicit contract and reputation
-provide historicval tract records to the public - introduce third party verification, eg J.D Power
An important element of organizational architecture of a firm
An important element of organizational architecture of a firm is partitioning all tasks within the firm to smaller blocks of tasks and assigning them to individuals and or teams.
One solution to high cost of ecision decentralization
One solution to high cost of ecision decentralization is to develop a rapid response team, which responds to requests of corporate information and know how from low level by providing ready access to data, documents and experienced consultants from headquarters.
Costs of team decision making
- costs of arriving a consensus or a rational decision -free rider problem increases with team size.
Optimal team size
Optimal team size is between two to twenty five

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