Division of Labor, Organizational Coordination and Market Mechanism in Collective Problem-Solving

Luigi Marengo () and Giovanni Dosi

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: This paper builds upon a view of economic system and individual economic organization as problem-solving arrangements and presents a simple model of adaptive problem-solving driven by trial-and-error and collective selection. The institutional structure, and in particular its degree of decentralization, determines which solutions are tried out and undergo selection. It is shown that if the design problem at hand is complex (in term of interdependencies between the elements of the system) then a decentralized institutional structure is very unlikely to ever generate optimal solutions and therefore no selection process can ever select them. We also show that nearly-decomposable structures have in general a selective advantage in terms of speed in reaching good locally optimal solutions.

Keywords: Theory of the firm; Vertical and horizontal integration; Computational complexity (search for similar items in EconPapers)
Date: 2003-12-06
New Economics Papers: this item is included in nep-cbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.lem.sssup.it/WPLem/files/2003-04.pdf (application/pdf)

Related works:
Journal Article: Division of labor, organizational coordination and market mechanisms in collective problem-solving (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2003/04

Access Statistics for this paper

More papers in LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).