The Economics of Organizing Economists

Posted by D. Daniel Sokol

Luke Froeb (Vanderbilt University - Owen Graduate School of Management), Paul Pautler (FTC) and Lars-Hendrik Roller (Wissenschaftszentrum Berlin für Sozialforschung ) have an interesting piece on The Economics of Organizing Economists

ABSTRACT: The organizational form of a competition agency affects its decision making. Functional organizations produce higher quality analysis but integrating the analysis into the decision-making process is more difficult than with a divisional form, organized around a specific sector or industry. This paper analyzes the tradeoff, with a particular focus on the role of economists in competition agencies around the world. We conclude that an effective functional organization requires strong horizontal links across the legal and economic bureaus and that an effective divisional organization requires separate economic and attorney recommendations, as well as managers who possess functional expertise in both economics and the law.