Synergy, Quantum Probabilities, and Cost of Control

John Fellingham and Doug Schroeder
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John Fellingham: Ohio State University
Doug Schroeder: Ohio State University

Chapter Chapter 4 in Essays in Accounting Theory in Honour of Joel S. Demski, 2007, pp 73-96 from Springer

Abstract: Abstract A standard control problem is analyzed using quantum probabilities. There are some advantages of conducting the analysis using the axiomatic structure of quantum probabilities: (1) there is synergy associated with bundling activities together, and, hence, a demand for the firm; (2) information occupies a central place in the analysis; (3) accounting information questions can be related to other information sciences. The main result is that control costs decline when aggregate performance measures are used; aggregation arises naturally. An implication is that the common practice of acquiring individual measures may be misguided in an environment where synergy is a first order effect. Also, double entry accounting appears well suited for processing information in a synergistic context.

Keywords: Aggregation; Agency; Quantum Probabilities; Synergy (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1007/978-0-387-30399-4_4

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