A Theory of Hierarchies Based on Limited Managerial Attention

John Geanakoplos () and Paul Milgrom
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John Geanakoplos: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/john-geanakoplos

No 775R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Our purpose in this paper is to investigate the economics of managerial organizations by focusing on the decision problem of management. Ours is a "team theory" analysis, that is, it ignores the problem of conflicting objectives among managers and focuses instead on the problem of coordinating the decisions of several imperfectly informed actors. However, unlike classical team theory, we concentrate on the choice by managers of what to know, as well as what to do, and we allow the possibility that bounded rationality limits the managers' ability to understand subtle messages.

Pages: 33 pages
Date: 1988-10
Note: CFP 794.
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Citations: View citations in EconPapers (1)

Published in Journal of the Japanese and International Economies (1991), 5: 205-225

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