IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v4y1999i2p101-126.html
   My bibliography  Save this article

Hierarchies and information-processing organizations

Author

Listed:
  • Hao Li

    () (School of Economics and Finance, The University of Hong Kong, Pokfulam Road, Hong Kong)

Abstract

This paper analyzes organizational structures that minimize information processing costs for a specific organizational task. Organizations consist of agents of limited ability connected in a network. These agents collect and process information, and make decisions. Organizations implement strategies - mappings from environmental circumstances to decisions. The strategies are exogenously given from a class of "pie" problems to be defined in this paper. The notion of efficiency is lexicographic: the primary criterion is minimizing the number of agents, and the secondary criterion is minimizing the number of connections between the agents. In this modeling framework, efficient organizations are not hierarchical for a large number of problems. Hierarchies often fail to exploit fully the information processing capabilities of the agents because in a hierarchy, subordinates have a single superior.

Suggested Citation

  • Hao Li, 1999. "Hierarchies and information-processing organizations," Review of Economic Design, Springer;Society for Economic Design, vol. 4(2), pages 101-126.
  • Handle: RePEc:spr:reecde:v:4:y:1999:i:2:p:101-126 Note: Received: 1 December 1995 / Accepted: 11 October 1998
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/10058/papers/9004002/90040101.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare,in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357 Elsevier.
    2. Nir Dagan, 1996. "New characterizations of old bankruptcy rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(1), pages 51-59, January.
    3. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    4. Toru Hokari & William Thomson, 2003. "Claims problems and weighted generalizations of the Talmud rule," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 241-261.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jun Tackseung & Kim Jeong-Yoo, 2010. "Designing the Efficient Information-Processing Organization," The B.E. Journal of Theoretical Economics, De Gruyter, pages 1-29.
    2. Hanushek, Eric A. & Raymond, Margaret E., 2001. "The Confusing World of Educational Accountability," National Tax Journal, National Tax Association, pages 365-384.
    3. Barr, Jason & Saraceno, Francesco, 2005. "Cournot competition, organization and learning," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 277-295, January.
    4. Orbay, Hakan, 2002. "Information Processing Hierarchies," Journal of Economic Theory, Elsevier, vol. 105(2), pages 370-407, August.

    More about this item

    Keywords

    Network; strategy; efficiency;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:4:y:1999:i:2:p:101-126. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.