Phrasing and Timing Information Dissemination in Organizations: Results of an Agent-Based Simulation

Doris A. Behrens (), Silvia Berlinger () and Friederike Wall ()
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Doris A. Behrens: Alpen-Adria Universität Klagenfurt
Silvia Berlinger: Ilogs AG
Friederike Wall: Alpen-Adria Universität Klagenfurt

A chapter in Artificial Economics and Self Organization, 2014, pp 179-190 from Springer

Abstract: Abstract This paper analyzes how managers suffering from decision-making biases in interrelated decision processes affect the performance of an overall business organization. To perform the analysis, we utilize an NK-type agent-based simulation model, in which decision-making is represented by adaptive walks on performance landscapes. We find that organizational performance holds up well, if the decision problem breaks into disjointed sub-problems. If decisions are, however, highly cross-related between departments, the overall organization’s performance degrades, while both negatively phrasing information and relying more heavily on recently derived information account for an improvement. The effect of positively phrasing information that is relevant for decision-making works towards the same direction, but much more reluctantly. These results cautiously raise doubt about the claim that decision-making should always be as rational as possible.

Keywords: Agent-based Simulation; Adaptive Walks; Performance Landscape; Interrelated Decisions; Multidivisional Organization (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-3-319-00912-4_14

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