ECONOMIC ANALYSIS AND MANAGEMENT STRATEGY: A SURVEY

Authors


  • I thank David Besanko and Jacek Prokop for helpful comments. I also thank Morton Kamien and an anonymous referee for helpful suggestions that greatly improved the paper. I am grateful to Sri Sridharan for his useful comments.

Abstract

The survey classifies economic theories of the firm into four categories based on the level of aggregation in economic models: (1) neoclassical, (2) industrial organization, (3) contractual, and (4) organizational incentive. Economic theories of the firm are evaluated on the basis of their potential application to problems of management decision making. The survey suggests that a management perspective can be useful in developing an integrated theoretical analysis of the firm that addresses both competitive strategy and organizational design.

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