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Managerial costs for one-shot decentralized information processing

Author

Listed:
  • Kieron Meagher

    (Economics Program, RSSS Australian National University, Canberra, ACT 0200, Australia (Tel.: +61)

  • Timothy Van Zandt

    (Department of Economics, Princeton University, Princeton, NJ 08544-1021, USA (Tel.: +1)

Abstract

Radner (1993) proposed a model of decentralized associative computation as a means to understand information processing in organizations. In the model, in which an organization processes a single cohort of data, resources are measured by the number of managers. This paper (i) explains why resources should instead be measured by the time the managers are busy, (ii) shows that, nevertheless, the characterization of sufficient conditions for efficient networks in Radner (1993) and Keren and Levhari (1979) is valid for either measure, (iii) shows that measuring resources by the number of operations leads to sharper results on necessary conditions for efficiency, (iv) strengthens Radner's results on the irregularity of efficient hierarchies, and (v) compares the relative costs of parallelization under the two measures.

Suggested Citation

  • Kieron Meagher & Timothy Van Zandt, 1998. "Managerial costs for one-shot decentralized information processing," Review of Economic Design, Springer;Society for Economic Design, vol. 3(4), pages 329-345.
    • Handle: RePEc:spr:reecde:v:3:y:1998:i:4:p:329-345
    Note: Received: 28 February 1997 / Accepted: 30 September 1997
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    Citations

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    Cited by:

    1. Grüner, Hans Peter & Schulte, Elisabeth, 2010. "Speed and quality of collective decision making: Incentives for information provision," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 734-747, December.
    2. Tobias Hiller, 2021. "Hierarchy and the size of a firm," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 68(3), pages 389-404, September.
    3. DeCanio, Stephen J. & Watkins, William E., 1998. "Information processing and organizational structure," Journal of Economic Behavior & Organization, Elsevier, vol. 36(3), pages 275-294, August.
    4. Van Zandt, Timothy, 2003. "Real-Time Hierarchical Resource Allocation with Quadratic Costs," CEPR Discussion Papers 4022, C.E.P.R. Discussion Papers.
    5. Schulte, Elisabeth & Peter Gruner, Hans, 2007. "Speed and quality of collective decision making: Imperfect information processing," Journal of Economic Theory, Elsevier, vol. 134(1), pages 138-154, May.
    6. Timothy Van Zandt, 1997. "Real-Time Hierarchical Resource Allocation," Discussion Papers 1231, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Hans Peter Grüner, 2010. "Speed and Quality of Collective Decision Making: Incentives for Information Provision," Post-Print hal-00911831, HAL.
    8. Hans Peter Grüner & Elisabeth Schulte, 2004. "Speed and Quality of Collective Decision Making: Incentives for," Levine's Bibliography 122247000000000417, UCLA Department of Economics.
    9. Orbay, Hakan, 2002. "Information Processing Hierarchies," Journal of Economic Theory, Elsevier, vol. 105(2), pages 370-407, August.
    10. Grüner, Hans Peter, 2007. "Protocol Design and (De-)Centralization," CEPR Discussion Papers 6357, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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