Organizational Equilibria and Production Efficiency

23 Pages Posted: 5 Oct 2006

See all articles by Ugo Pagano

Ugo Pagano

University of Siena - Department of Economics


New Institutional Theory has pointed out mechanisms by which technology can influence property rights and organizational forms. We argue that the argument can be integrated and enriched by using also the opposite argument: property rights and technology can also influence technology. We develop an "organizational equilibria" framework and we show that when New Institutional Theory is integrated in this direction, a multiplicity of "organizational equilibria" can arise and production efficiency may no longer be achieved. The paper introduces the argument by pointing out some similarities between Marx's theory of history and modern transaction cost theories, which imply a common departure form the standard methodology of traditional neoclassical theory.

Keywords: New Institutional Theory, Radical Economists, Marxian Theory, Multiple Equilibria

JEL Classification: L2, M2, P1, P5

Suggested Citation

Pagano, Ugo, Organizational Equilibria and Production Efficiency. Metroeconomica, Vol. 43, No. 1, 1992, Available at SSRN:

Ugo Pagano (Contact Author)

University of Siena - Department of Economics ( email )

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