Division of Labor, Organizational Coordination and Market Mechanism in Collective Problem-Solving
This paper builds upon a view of economic system and individual economic organization as problem-solving arrangements and presents a simple model of adaptive problem-solving driven by trial-and-error and collective selection. The institutional structure, and in particular its degree of decentralization, determines which solutions are tried out and undergo selection. It is shown that if the design problem at hand is complex (in term of interdependencies between the elements of the system) then a decentralized institutional structure is very unlikely to ever generate optimal solutions and therefore no selection process can ever select them. We also show that nearly-decomposable structures have in general a selective advantage in terms of speed in reaching good locally optimal solutions.
|Date of creation:||06 Dec 2003|
|Contact details of provider:|| Postal: Piazza dei Martiri della Liberta, 33, 56127 Pisa|
Web page: http://www.lem.sssup.it/
More information through EDIRC
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.:
- Alchian, Armen A & Demsetz, Harold, 1972.
"Production , Information Costs, and Economic Organization,"
American Economic Review,
American Economic Association, vol. 62(5), pages 777-795, December.
- Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
- Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 299-322 National Bureau of Economic Research, Inc.
- Gary S. Becker & Kevin M. Murphy, 1992. "The Division of Labor, Coordination Costs, and Knowledge," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1137-1160.
- Becker, G.S. & Murphy, K.M., 1991. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - Economics Research Center 92-5, Chicago - Economics Research Center.
- Gary S. Murphy Becker & Kevin M., 1992. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - George G. Stigler Center for Study of Economy and State 79, Chicago - Center for Study of Economy and State.
- Perry, Martin K., 1989. "Vertical integration: Determinants and effects," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 4, pages 183-255 Elsevier.
- Morroni,Mario, 1992. "Production Process and Technical Change," Cambridge Books, Cambridge University Press, number 9780521410014, September.
- Scott E. Page, 1996. "Two measures of difficulty (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211-211.
- Herbert A. Simon, 2002. "Near decomposability and the speed of evolution," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 587-599, June.
- Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, July.
- David, Paul A., 1994. "Why are institutions the 'carriers of history'?: Path dependence and the evolution of conventions, organizations and institutions," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 205-220, December.
- Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
- Radner, Roy, 2000. "Costly and Bounded Rationality in Individual and Team Decision-Making," Industrial and Corporate Change, Oxford University Press, vol. 9(4), pages 623-658, December.
- Loasby, Brian J., 1998. "The organisation of capabilities," Journal of Economic Behavior & Organization, Elsevier, vol. 35(2), pages 139-160, April.
- Brian J. Loasby, "undated". "The Organisation of Capabilities," Working Papers Series 96/6, University of Stirling, Division of Economics.
- Cohen, Michael D, et al, 1996. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Industrial and Corporate Change, Oxford University Press, vol. 5(3), pages 653-698.
- Michael D. Cohen & Roger Burkhart & Giovanni Dosi & Massimo Egidi & Luigi Marengo & Massimo Warglien & Sidney Winter & with comments by Benjamin Coriat, 1995. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Working Papers 95-11-101, Santa Fe Institute.
- Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-181.
- Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, July.
- Levinthal, Daniel A, 1998. "The Slow Pace of Rapid Technological Change: Gradualism and Punctuation in Technological Change," Industrial and Corporate Change, Oxford University Press, vol. 7(2), pages 217-247, June.
- Page, Scott E, 1996. "Two Measures of Difficulty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346, August.
- Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December.
- Daniel A. Levinthal, 1997. "Adaptation on Rugged Landscapes," Management Science, INFORMS, vol. 43(7), pages 934-950, July.
- Brian J. Loasby, 2001. "Organisation as Interpretative Systems," Revue d'Économie Industrielle, Programme National Persée, vol. 97(1), pages 17-34.
- Dow, Gregory K., 1987. "The function of authority in transaction cost economics," Journal of Economic Behavior & Organization, Elsevier, vol. 8(1), pages 13-38, March. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ssa:lemwps:2003/04. 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: ()
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.