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Scale economies in nonprofit provision, technology adoption and entry
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Scharf, Kimberly A. (2011) Scale economies in nonprofit provision, technology adoption and entry. Working Paper. Coventry, UK: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2011 (Number 45).
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Text (Working paper)
WRAP_45.2011_scharf.pdf - Published Version Download (554Kb) | Preview |
Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
We study competition between nonprofit providers that supply a collective
service through increasing-returns-to-scale technologies under conditions
of free entry. When providers adopt a not-for-profit mission, the
absence of a residual claimant can impede entry, protecting the position
of an inefficient incumbent. Moreover, when providers supply goods
that are at least partly public in nature, they may be unable to sustain the
adoption of more efficient technologies that feature fixed costs, because
buyers (private donors) face individual incentives to divert donations towards
charities that adopt inferior, lower-fixed-cost technologies. These
incentives may give rise to a technological race to the bottom, where nonprofit
providers forgo opportunities to exploit scale economies. In these
situations, government grants in support of core costs can have a nonneutral
effect on entry, technology adoption, and industry performance.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory Q Science > QA Mathematics |
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Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Economics -- Mathematical models , Nonprofit organizations -- Economic aspects, Nonprofit organizations -- Finance, Technology | ||||
Series Name: | CAGE Online Working Paper Series | ||||
Publisher: | Department of Economics, University of Warwick | ||||
Place of Publication: | Coventry, UK | ||||
Official Date: | June 2011 | ||||
Dates: |
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Volume: | Volume 2011 | ||||
Number: | Number 45 | ||||
Number of Pages: | 31 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 1 August 2016 | ||||
Date of first compliant Open Access: | 1 August 2016 | ||||
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