The paper is concerned with communication within a team of players trying to coordinate in response to information dispersed among them. The problem is non-trivial because they cannot communicate all information instantaneously, but have to send longer or shorter sequences of messages, using coarse codes. We focus on the design of these codes and show that members may gain comaptibility advantages by using identical codes, and that this can support the existence of several, more or less efficient, symmetric equilibria. Asymmetric eqilibria exist if coordination across different sets of members is of differing importance, and fewer symmetric equilibria exist if the members' local environments are sufficiently heterogeneous. The results are consistent with the stylized fact that firms differ even within industries, and that coordination between divisions is harder than coordination inside divisions.
|Date of creation:||03 Feb 2003|
|Date of revision:|
|Contact details of provider:|| Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA|
Web page: http://mitsloan.mit.edu/
More information through EDIRC
|Order Information:|| Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA|
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.:
- Kofman, Fred & Ratliff, James D., 1996. "Monolog vs. dialog in costly bilateral communication," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 431-443, December.
- Matthew Rabin and Joel Sobel., 1993.
"Deviations, Dynamics and Equilibrium Refinements,"
Economics Working Papers
93-211, University of California at Berkeley.
- J. Farrell, 2010.
"Meaning and Credibility in Cheap Talk Games,"
Levine's Working Paper Archive
533, David K. Levine.
- Farrell, Joseph, 1986. "Meaning and Credibility in Cheap-Talk Games," Department of Economics, Working Paper Series qt4968n3fz, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell., 1986. "Meaning and Credibility in Cheap-Talk Games," Economics Working Papers 8609, University of California at Berkeley.
- Wernerfelt, Birger, 1997. "On the Nature and Scope of the Firm: An Adjustment-Cost Theory," The Journal of Business, University of Chicago Press, vol. 70(4), pages 489-514, October.
- Rubinstein,Ariel, 2000.
"Economics and Language,"
Cambridge University Press, number 9780521593069, june. pag.
- Ariel Rubinstein, 2005. "Economics and Language," Levine's Bibliography 666156000000000654, UCLA Department of Economics.
- Rubinstein, A., 1998. "Economics and Language," Papers 14-98, Tel Aviv.
- A. Rubinstein, 1999. "Economics and Language," Princeton Economic Theory Papers 00s6, Economics Department, Princeton University.
- Ramey, Garey & Watson, Joel, 2000.
"Conditioning Institutions and Renegotiation,"
University of California at San Diego, Economics Working Paper Series
qt5zd216tw, Department of Economics, UC San Diego.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- anonymous, 1978. "Communication," Management Science, INFORMS, vol. 24(9), pages 919-919, May.
- 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, 1996. "The firm as a communication network," ULB Institutional Repository 2013/9597, 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.
- Rubinstein, Ariel, 1996. "Why Are Certain Properties of Binary Relations Relatively More Common in Natural Language?," Econometrica, Econometric Society, vol. 64(2), pages 343-55, March.
- Margaret A. Meyer, 1991. "Learning from Coarse Information: Biased Contests and Career Profiles," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 15-41.
- Duncan Simester & Marc Knez, 2002. "Direct and Indirect Bargaining Costs and the Scope of the Firm," The Journal of Business, University of Chicago Press, vol. 75(2), pages 283-304, April.
- James Dow, 1991. "Search Decisions with Limited Memory," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 1-14.
- Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
- Patrick Bolton & Mathias Dewatripont, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 809-839.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Timothy Van Zandt & Roy Radner, 1998. "Real-Time Decentralized Information Processing and Returns to Scale," Discussion Papers 1233, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
When requesting a correction, please mention this item's handle: RePEc:mit:sloanp:1812. 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: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.