Theoretical analysis reveals expanding deadlines shift optimal effort allocations into deeper layers within production hierarchies, indicating curvature governs adjustment mode rather than direction.
We study how a deadline affects the optimal allocation of scarce installation effort across layers of a production hierarchy. Heterogeneity in productivity, costs, and propagation delays generates a depth-horizon return kernel that satisfies the single-crossing property. Under convex installation technologies, this property orders pure choices; under arbitrary layer-specific concave technologies, it shifts the unique allocation toward deeper layers as the horizon expands. Isoelastic technologies yield a closed-form likelihood-ratio ordering. The results hold with finite marginal productivity at zero and arbitrary layer-specific depreciation rates. Thus, curvature determines whether adjustment is discrete or diversified, but not its direction.
No takes yet. Share an insight, caveat, or question.
Florentin Koch (2026) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: