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Edgeworth and the Travelling Salesman: The Complexity of Coalition Structures

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Author Info
Arthur DeVany (Department of Economics and Institute for Mathematical Behavioral Sciences, UCI)
Abstract

An economic organization represents order and information. I define an economic organization to be a coalition of consistent multilateral contracts and develop measures of its complexity. I show that when a new organization is formed, information is created. I find there are information economies of scale to organizations and that the institutions of property rights and contracts underlie these economies. I also show that organizations that are optimal must contain unbounded information. This suggests that optimal organizations must be boundedly rational or formed by processes that are.

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Paper provided by University of California at Los Angeles, Center for Computable Economics in its series Working Papers with number _017.

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Handle: RePEc:wop:callce:_017

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