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Research Report: Intrafirm Resource Allocation with Asymmetric Information and Negative Externalities

Author

Listed:
  • Raja Nadiminti

    (Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213-3890)

  • Tridas Mukhopadhyay

    (Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213-3890)

  • Charles H. Kriebel

    (Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213-3890)

Abstract

We examine the intrafirm resource allocation problem with the following characteristics. The resource exhibits negative externalities, and the benefit of using the resource is known only to the user department and not to top management or other user departments. In addition, the consumption of the resource depends upon the choice of the mechanism for allocating the resource. For this problem, we derive a two-stage mechanism, and show that this proposed mechanism leads to optimal allocation.

Suggested Citation

  • Raja Nadiminti & Tridas Mukhopadhyay & Charles H. Kriebel, 2002. "Research Report: Intrafirm Resource Allocation with Asymmetric Information and Negative Externalities," Information Systems Research, INFORMS, vol. 13(4), pages 428-434, December.
    • Handle: RePEc:inm:orisre:v:13:y:2002:i:4:p:428-434
    DOI: 10.1287/isre.13.4.428.70
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    References listed on IDEAS

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    Cited by:

    1. Ke-Wei Huang & Arun Sundararajan, 2011. "Pricing Digital Goods: Discontinuous Costs and Shared Infrastructure," Information Systems Research, INFORMS, vol. 22(4), pages 721-738, December.
    2. Sagnika Sen & T. S. Raghu & Ajay Vinze, 2009. "Demand Heterogeneity in IT Infrastructure Services: Modeling and Evaluation of a Dynamic Approach to Defining Service Levels," Information Systems Research, INFORMS, vol. 20(2), pages 258-276, June.
    3. Ke-Wei Huang & Arun Sundararajan, 2006. "Pricing Digital Goods: Discontinuous Costs and Shared Infrastructure," Working Papers 06-11, NET Institute, revised Sep 2006.

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