A theory of hierarchies based on limited managerial attention
AbstractOur purpose in this paper is to investigate the economics of managerial organizations by focusing on the decision problem of management. Ours is a "team theory" analysis, that is, it ignores the problem of conflicting objectives among managers and focuses instead on the problem of coordinating the decisions of several imperfectly informed actors. However, unlike classical team theory, we concentrate on the choice by managers of what to know, as well as what to do, and we allow the possibility that bounded rationality limits the managers' ability to understand subtle messages.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of the Japanese and International Economies.
Volume (Year): 5 (1991)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/622903
Other versions of this item:
- John Geanakoplos & Paul R. Milgrom, 1988. "A Theory of Hierarchies Based on Limited Managerial Attention," Cowles Foundation Discussion Papers 775R, Cowles Foundation for Research in Economics, Yale University.
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- Paul R. Milgrom & Robert J. Weber, 1983. "Organizing Production in a Large Economy," Cowles Foundation Discussion Papers 672, Cowles Foundation for Research in Economics, Yale University.
- Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
- Beckmann, Martin J., 1977. "Management production functions and the theory of the firm," Journal of Economic Theory, Elsevier, vol. 14(1), pages 1-18, February.
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