System catastrophe: A distributive model for organizational collective phenomenon

The phenomenon of system catastrophe often occurs in a system with a network structure. A system’s resources can be utilized in two different modes: efficiently or inefficiently. When actions with inefficient mode pose no threat to other users or, in other words, when they employ resources that would otherwise be idle, they do not waste the system's resources at all. But when critical levels of inefficient uses of sys-tem's resources are reached, there is a sudden decrease in the capacity of the system due to the multiplication effect of inefficient factors. This collective inefficiency re-sults in everyone getting worse in average. The common theme behind the catastrophe phenomenon demonstrates a possible explanation for the famous question about the choice between market and hierarchy. That is, when all firms pursue their own indi-vidual interests, resulting in a collective breakdown, they turn to consolidated ways of carrying out transactions