Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68857
Authors: 
Fabel, Oliver
Year of Publication: 
2001
Series/Report no.: 
Diskussionsbeiträge: Serie 1, Fachbereich Wirtschaftswissenschaften, Universität Konstanz 314
Abstract: 
The O-Ring theory provides a framework for analyzing the effects of team production on the emergence of firms in the New Economy. Given risk-aversion of the potential team members, the productive advantage of perfect ability matching in teams suffices to establish an equilibrium which separates Old and New Economy. In particular, it is not necessary to assume that firms in the New Economy possess exclusive access to a superior production technology. It must only be true that individual abilities can be observed in partnerships which self-manage production and consequently distribute the surplus among the team members. At the same time, abilities remain private information of the employees in managed firms organized on behalf of a profit-maximizing residual claimant.
Subjects: 
New Economy
O-Ring theory
ability matching
partnership firms
JEL: 
D2
L2
M2
Document Type: 
Working Paper

Files in This Item:
File
Size
827.17 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.