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Ownership Principles for Distributed Database Design

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  • Marshall Van Alstyne
  • Erik Brynjolfsson
  • Stuart Madnick

Abstract

This research addresses the issues of database ownership and incentives and their impact on information sharing and system performance. Existing research has identified the benefits of centralized control and has formalized the importance of a vested authority setting standards, working towards user transparency, and reducing organization wide data inconsistencies. In practice, however, many centralization and standardization efforts have failed, typically because departments lacked incentives or needed greater local autonomy. Unfortunately, motivational factors have typically eluded formal characterization. Using an "incomplete contracts" approach from economics, it is possible to model the costs and benefits of decentralization, including critical intangible factors. This paper presents normative principles of database decentralization; it derives formulas that give the principles a theoretical underpinning; and it illustrates the application of each principle in actual practice.

Suggested Citation

  • Marshall Van Alstyne & Erik Brynjolfsson & Stuart Madnick, 1993. "Ownership Principles for Distributed Database Design," Working Paper Series 142, MIT Center for Coordination Science.
    • Handle: RePEc:wop:mitccs:142
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    References listed on IDEAS

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    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    3. Siegel, Michael D. & Madnick, Stuart E., 1991. "Context interchange : sharing the meaning of data," Working papers 3356-91. CIS (Series) (Sl, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    4. Brynjolfsson, Erik., 1991. "An incomplete contracts theory of information, technology and organization," Working papers #126. Working paper (Sloa, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Madnick, Stuart E. & Siegel, Michael D. & Wang, Y. Richard, 1990. "The Composite Information Systems Laboratory (CISL) project at MIT," Working papers 3157-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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