Designing the Efficient Information-Processing Organization
We model a hierarchy consisting of a fixed number of heterogeneous agents, each of which reports (possibly distorted) information to its direct superior who can detect and correct the misreport with some probability. Two problems are simultaneously considered: designing the efficient hierarchy structure and configuring the agents who are heterogeneous in their trustworthiness. We develop the Unimprovability Principle, which is an analogy of Bellman Principle. By applying the principle, we show that efficiency requires only the least reliable agent in any rank to have subordinates.
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Volume (Year): 10 (2010)
Issue (Month): 1 (October)
Pages: 1-29
| Handle: | RePEc:bpj:bejtec:v:10:y:2010:i:1:n:45 |
| Contact details of provider: | Web page: https://www.degruyter.com
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| Order Information: | Web: https://www.degruyter.com/view/j/bejte |
References listed on IDEAS
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.:
- Mathias Dewatripont & Patrick Bolton, 1994.
"The firm as a communication network,"
ULB Institutional Repository
2013/9595, ULB -- Universite Libre de Bruxelles.
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