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The Firm as a Communication Network - (Now published in 'Quarterly Journal of Economics' CIX(4) (December 1994), pp.809-839. Reprinted in Mark Casson (ed.). 'The Theory of the Firm'(Edward Elgar Publishing, 1997)

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  • Patrick Bolton
  • Mathias Dewatripont

Abstract

In this paper the internal organisation of firms is reduced to the organisation of a communication network. In the presence of information communication and processing costs it is important to design rules guiding which members of the firm ought to communicate with one another on a regular basis. Restricting access to some agents of the firm is an important way in which overall information communication costs can be economised. The problem of design of an internal organisation can then be seen as a problem of determining who is allowed to communicate with whom.

Suggested Citation

  • Patrick Bolton & Mathias Dewatripont, 1992. "The Firm as a Communication Network - (Now published in 'Quarterly Journal of Economics' CIX(4) (December 1994), pp.809-839. Reprinted in Mark Casson (ed.). 'The Theory of the Firm'(Edward Elgar Publi," STICERD - Theoretical Economics Paper Series 256, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    • Handle: RePEc:cep:stitep:256
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