Efficient organization of information processing
The paper examines the application of the concept of economic efficiency to organizational issues of collective information processing in decision making. Information processing is modeled in the framework of the dynamic parallel processing model of associative computation with an endogenous setup cost of the processors. The model is extended to include the specific features of collective information processing in the team of decision makers which may lead to an error in data analysis. In such a model, the conditions for efficient organization of information processing are defined and the architecture of the efficient structures is considered. We show that specific features of collective decision making procedures require a broader framework for judging organizational efficiency than has traditionally been adopted. In particular, and contrary to the results available in economic literature, we show that there is no unique architecture for efficient information processing structures, but a number of various efficient forms. The results indicate that technological progress resulting in faster data processing (ceteris paribus) will lead to more regular information processing structures. However, if the relative cost of the delay in data analysis increases significantly, less regular structures could be efficient. Copyright © 2007 John Wiley & Sons, Ltd.
Volume (Year): 28 (2007)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 |
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.:
- Barton L. Lipman, 1995.
"Information Processing and Bounded Rationality: A Survey,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 28(1), pages 42-67, February.
- Barton L. Lipman, 1993. "Information Processing and Bounded Rationality: A Survey," Working Papers 872, Queen's University, Department of Economics.
- Mathias Dewatripont & Patrick Bolton, 1996.
"The firm as a communication network,"
ULB Institutional Repository
2013/9597, ULB -- Universite Libre de Bruxelles.
- Mathias Dewatripont & Patrick Bolton, 2004. "The firm as a communication network," ULB Institutional Repository 2013/9599, ULB -- Universite Libre de Bruxelles.
- Mathias Dewatripont & Patrick Bolton, 1994. "The firm as a communication network," ULB Institutional Repository 2013/9595, ULB -- Universite Libre de Bruxelles.
- Andrzej Baniak & Jacek Cukrowski, 1999. "Organizational restructuring in response to changes in information-processing technology," Review of Economic Design, Springer, vol. 4(4), pages 295-305.
- Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-46, September.
- Michael Keren & David Levhari, 1979. "The Optimum Span of Control in a Pure Hierarchy," Management Science, INFORMS, vol. 25(11), pages 1162-1172, November.
- Prat, Andrea, 1997. "Hierarchies of Processors with Endogenous Capacity," Journal of Economic Theory, Elsevier, vol. 77(1), pages 214-222, November.
- VAN ZANDT, Timothy, 1995. "Continuous Approximations in the Study of Hierarchies," CORE Discussion Papers 1995002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:28:y:2007:i:1:p:13-26. 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: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.