If we’re going to understand why construction has so few economies of scale, it’s useful to know what causes economies of scale to occur in the first place. Economies of scale are the result of several different mechanisms.
More business focused, but a great text that goes deep into this is Economics of Strategy by Besanko et al. Please see below for the notes I took on the book. This topic begins on page 12:
Great article! I think the dis-economies of scale is a great topic for you to expand upon. You mentioned the risk of component failure as a source of statistical dis-economy. In my opinion, the risk of a coordination failure is far more likely / relevant to construction and this increases as you add systems and size to prefab assemblies.
Where Do Economies of Scale Come From?
More business focused, but a great text that goes deep into this is Economics of Strategy by Besanko et al. Please see below for the notes I took on the book. This topic begins on page 12:
https://antonzitz.com/wp-content/uploads/2020/07/Economics-of-Strategy_f.pdf
This is fabulous. As an economist who works in supply chain and operations, this nails so many points I wish I could drive into people's heads :)
Great article! I think the dis-economies of scale is a great topic for you to expand upon. You mentioned the risk of component failure as a source of statistical dis-economy. In my opinion, the risk of a coordination failure is far more likely / relevant to construction and this increases as you add systems and size to prefab assemblies.
What book is the Funk 2013 page from?