The 14th Jerusalem School in Economic Theory: The Internal Structure of the Firm

Sun, 22/06/2003 to Mon, 30/06/2003

The Internal Structure of the Firm

General Director:
Kenneth J. Arrow, Stanford University

Eyal Winter, The Hebrew University of Jerusalem


Program >


The application of economic theory to explain and to optimize the internal structure of firms will be the subject of the School. The standard textbook analysis of the firm assumes it to be essentially a point, with no internal structure. The firm may have employees, but they are simply another purchased unput. Business literature, on the other hand, is replete with analyses which depend on the idea that the firm is an organization with many members, whose interconnections can be varied. Once it is recognized that the firm has many foci of decision, with initially varying information and motivations, the positive and normative analysis of the firm assumes different dimensions. There have been a number of attempts from varying viewpoints to explain the observed structure of firms, including both authority relations and information flows. These different perspectives have not been unified, and the effort of the Summer School is to present representatives of different points of view.



Paul Milgrom, Stanford University
Stefan J. Reichelstein, Stanford University
Zur Shapira, New York University
Timothy Van Zandt, INSEAD

With the support of the Center for the Study of Rationality