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Economic Modeling Triggers More Efficient Planning: An Experimental Justification

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  • Jean Ponssard
  • Olivier Saulpic

Abstract

Consider a firm as an organization that needs to efficiently coordinate several specialized departments in an uncertain environment. Decision making involves collective planning sessions and decentralized operational processes. In this setting this paper explores the role of economic modeling through an experimental game. Results support the idea that economic modeling favors higher performance. Economic modeling facilitates the emergence of common knowledge and the decomposition of a group decision problem into individual decision problems that are meaningfully interrelated. Copyright Springer 2005

Suggested Citation

  • Jean Ponssard & Olivier Saulpic, 2005. "Economic Modeling Triggers More Efficient Planning: An Experimental Justification," Theory and Decision, Springer, vol. 58(3), pages 239-282, May.
    • Handle: RePEc:kap:theord:v:58:y:2005:i:3:p:239-282
    DOI: 10.1007/s11238-005-6593-2
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    References listed on IDEAS

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    1. Jacques Cremer, 1980. "A Partial Theory of the Optimal Organization of a Bureaucracy," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 683-693, Autumn.
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    Cited by:

    1. repec:dau:papers:123456789/3143 is not listed on IDEAS
    2. Nicolas Berland & Jean-Pierre Ponssard & Olivier Saulpic, 2005. "Une typologie des systèmes de contrôle inspirée du cadre théorique de Simons," Working Papers hal-00243012, HAL.
    3. Nicolas Berland & Jean-Pierre Ponssard & Olivier Saulpic, 2006. "Recurrent Attempts to Renovate Management ControlRevisited through a Simons' Perspective," Working Papers hal-00243033, HAL.
    4. repec:dau:papers:123456789/3053 is not listed on IDEAS

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    More about this item

    Keywords

    economic modeling; interactive rationality; planning; organizational learning; D83; L2; M21;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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