THE ORGANIZATIONAL COST OF PROTECTION

• 成果类型: Article
• 署名作者: VOUSDEN, N; CAMPBELL, N
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/0022-1996(94)90046-9
• 发表日期: 1994
• 页码: 219-238
• 关键词: ORGANIZATIONAL COST OF PROTECTION

摘要

This paper offers another explanation for the proposition that protection induces slack. It employs a model of a hierarchic firm in which the firm's owner cannot observe the cost type or the effort level of his manager. A production subsidy, by stimulating output, may increase the marginal information rents that have to be paid to the manager for higher effort. The resulting increase in the firm's marginal cost of effort leads to reduced managerial effort amplifying the intra-firm effort distortion if effort is initially below the optimal level and yielding an organizational cost of protection additional to the standard deadweight cost.