Speed and Quality of Collective Decision-Making, I: Imperfect Information Processing

Grüner, Hans Peter and Elisabeth Schulte ()

No 4179, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A group of P identical managers has to make a choice between N alternatives. They benefit from reaching the decision quickly. In order to learn which is the best option, the alternatives have to be compared. A manager is able to identify the better one of two alternatives only with a certain probability. This Paper compares three different hierarchy designs with respect to decision quality: two strictly balanced hierarchies and the fastest hierarchy, which is the skip-level reporting tree proposed by Radner (1993). The latter hierarchy design is found to outperform the two others not only in terms of speed and cost but also in terms of decision quality.

Keywords: Information processing; Hierarchies; Bounded rationality (search for similar items in EconPapers)
JEL-codes: D23 D70 D83 L22 P51 (search for similar items in EconPapers)
Date: 2004-02
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Speed and quality of collective decision making: Imperfect information processing (2007)
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