Fred Brooks' "The Mythical Man Month" has a lot about this in the specific context of software. His point is that the number of two-way conversations that need to take place in a big complicated project rises with the square of the number of employees. So in order to "double" your managerial input, you actually need to square it.
dd -----Original Message----- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Jim Devine Sent: 08 May 2006 21:31 To: [email protected] Subject: Re: Is Krugman right here? On 5/8/06, Julio Huato <[EMAIL PROTECTED]> wrote: > ... How can you have decreasing returns to scale? You can't! Say k = 2. > If you are really doubling *all* of your inputs, then the least that > you can get is double your output. That should be obvious. The > typical textbook example of decreasing returns to scale is that too > large a productive unit becomes harder to manage or runs into resource > scarcity. Well, then you are not doubling your managerial input or > your raw materials along with the other inputs, are you?
