Emmanuel Raynaud



(Wednesday, 1st January 2003)

Title : The Analysis of Complementarities in Contractual and Organizational Design

The aim of this workshop is to analyze how the recent analysis of complementarities à la Milgrom and Roberts (1990), Holmström and Milgrom (1994), can contributes to a better understanding of organizational and contractual design. This literature highlights the fact that economic organizations should be analyzed as a system of coherent attributes. In the workshop, I will develop the economics of complementarity, focusing first on the mathematical concept of supermodularity and then developing its applications for the economics of organization. Empirical analysis trying to assess the extent of complementarities among attributes will also be presented with a particular emphasis on estimation challenges and econometric solutions.

Download a bibliography of articles.

Bibliographical references :

Must read reference : Cockburn, I., Henderson, R. and S. Stern (2000), "Balancing Incentives: The Tension between Basic and Applied Research”, working paper, MIT, Sloan School of Business.

Athey, S., S. Stern (1998), "An Empirical Framework for Testing Theories about Complementarities in Organizational Design", NBER working paper 6600.

Brickley, J. (1999), "Incentive Conflicts and Contractual Restraints: Evidence from Franchising", Journal of Law & Economics, 42(2), 745-774

Holmström, B., P. Milgrom (1994), "The Firm as an Incentive System", American Economic Review, 84, 972-991.

Ichniowski, C.K., K. Shaw and G. Prennushi (1997), "The Effects of Human Resource Management Practices on Productivity", American Economic Review, 87(3), 291-313.