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 InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 775R.
Length: 33 pages
Date of creation: Oct 1988
Date of revision:
Publication status: Published in Journal of the Japanese and International Economies (1991), 5: 205-225
Note: CFP 794.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Geanakoplos, John & Milgrom, Paul, 1991. "A theory of hierarchies based on limited managerial attention," Journal of the Japanese and International Economies, Elsevier, vol. 5(3), pages 205-225, September.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
- 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.
- 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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