Abstract
Organisational slack is a central variable in the behavioural theory of the firm (Cyert and March, 1963). Ever since Leibenstein (1966) described organisational slack under the name of ‘X-inefficiency’, the pervasiveness of the phenomenon has caught the attention of many economists. In his book Beyond Economic Man Leibenstein (1976) discusses a number of empirical studies which show the importance of organisational slack. However, present-day textbooks on microeconomics almost ignore the concept, as does most of the literature on formal models of imperfect competition.
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References
Collins, N. R. and Preston, L. E. (1969) ‘Price-Cost Margins and Industry Structure’, Review of Economics and Statistics, vol. 54, pp. 271–86.
Cyert, R. M. and March, J. G. (1963) A Behavioral Theory of the Firm,(Englewood Cliffs, New Jersey: Prentice-Hall).
Leibenstein, Harvey (1966) ‘Allocative efficiency versus X-efficiency’, American Economic Review, vol. 66, pp. 392–415.
Leibenstein, Harvey (1976) Beyond Economic Man, (Cambridge, Mass.: Harvard University Press).
Shepherd, W. G. (1972) ‘The Elements of Market Structure’, Review of Economics and Statistics, vol. 54, pp. 25–37.
Collins, N. R. and Preston, L. E. (1969) ‘Price-Cost Margins and Industry Structure’, Review of Economics and Statistics, vol. 54, pp. 271–86.
Cyert, R. M. and March, J. G. (1963) A Behavioral Theory of the Firm,(Englewood Cliffs, New Jersey: Prentice-Hall).
Leibenstein, Harvey (1966) ‘Allocative efficiency versus X-efficiency’, American Economic Review, vol. 66, pp. 392–415.
Leibenstein, Harvey (1976) Beyond Economic Man, (Cambridge, Mass.: Harvard University Press).
Shepherd, W. G. (1972) ‘The Elements of Market Structure’, Review of Economics and Statistics, vol. 54, pp. 25–37.
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© 1986 International Economic Association
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Selten, R. (1986). Elementary Theory of Slack-ridden Imperfect Competition. In: Stiglitz, J.E., Mathewson, G.F. (eds) New Developments in the Analysis of Market Structure. International Economic Association Series, vol 77. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18058-5_4
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