Coordination in Centralized and Decentralized Systems

Vipin P Veetil ()
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Vipin P Veetil: Centre d?economie de la Sorbonne, Paris, France.

International Journal of Microsimulation, 2017, vol. 10, issue 2, 86-102

Abstract: We study a simple coordination problem to understand the difference between centralized and decentralized economic systems. The decentralized system is more robust than the centralized system to communication errors. But the centralized system takes less time than the decentralized system to create coordination among constituent parts. Decentralization is preferable when the constituent parts are more likely to make communication errors, when there is little urgency, and when there is need to prevent system-collapse.

Keywords: COORDINATION; COMMUNICATION ERRORS; ECONOMIC SYSTEMS; ROBUSTNESS (search for similar items in EconPapers)
JEL-codes: D21 D22 L11 L22 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ijm:journl:v10:y:2017:i:2:p:86-102

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