Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Aspects of the X-Efficiency Theory of the Firm

Harvey Leibenstein
The Bell Journal of Economics
Vol. 6, No. 2 (Autumn, 1975), pp. 580-606
Published by: RAND Corporation
DOI: 10.2307/3003244
Stable URL: http://www.jstor.org/stable/3003244
Page Count: 27
  • Read Online (Free)
  • Download ($24.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Aspects of the X-Efficiency Theory of the Firm
Preview not available

Abstract

The model explains the phenomenon of X-inefficiency, and presents some microeconomic propositions based on new foundations that go beyond the economic man postulate. It postulates behavior based on a compromise between internal standards and unconstrained desires. The analysis emphasizes: (1) the individual, not the firm, as the basic decision unit; (2) the notion of effort as the basic variable; and (3) the determination of costs as a result of interconnected individual effort decisions, not by simultaneous price, technique, and quantity decisions by some "supermanager." Firm members are presumed to have discretion and hence to interpret their jobs. Inert behavioral areas, entropy, and the motivational interpretation of signals are basic elements of the model. One result is that firms do not minimize costs, and this may hold even under competition.

Page Thumbnails

  • Thumbnail: Page 
580
    580
  • Thumbnail: Page 
581
    581
  • Thumbnail: Page 
582
    582
  • Thumbnail: Page 
583
    583
  • Thumbnail: Page 
584
    584
  • Thumbnail: Page 
585
    585
  • Thumbnail: Page 
586
    586
  • Thumbnail: Page 
587
    587
  • Thumbnail: Page 
588
    588
  • Thumbnail: Page 
589
    589
  • Thumbnail: Page 
590
    590
  • Thumbnail: Page 
591
    591
  • Thumbnail: Page 
592
    592
  • Thumbnail: Page 
593
    593
  • Thumbnail: Page 
594
    594
  • Thumbnail: Page 
595
    595
  • Thumbnail: Page 
596
    596
  • Thumbnail: Page 
597
    597
  • Thumbnail: Page 
598
    598
  • Thumbnail: Page 
599
    599
  • Thumbnail: Page 
600
    600
  • Thumbnail: Page 
601
    601
  • Thumbnail: Page 
602
    602
  • Thumbnail: Page 
603
    603
  • Thumbnail: Page 
604
    604
  • Thumbnail: Page 
605
    605
  • Thumbnail: Page 
606
    606