Garicano, Luis and Prat, Andrea
Organizational economics with cognitive costs.
In: Econometric Society World Congress, 17-21 Aug 2010, Shanghai, China.
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Organizational economics has advanced along two parallel tracks, one concerned with motivating agents with diverging objectives, the other - less developed - with coordinating
agents with cognitive limits. This survey focuses on the second strand and on attempts to bring the two strands together. Organizations are viewed as responses to the cognitive costs faced by their (potential) members. We review existing approaches such as team theory, hierarchies of processors, organizational languages and knowledge hierarchies and we argue that they can help us address an array of important organizational issues. We also review recent developments in the application of these ideas: exploiting complexity measures, combining team theory and contract theory, applying organization theories in labor economics, and using these theories to interpret the wealth of activity data that is becoming available.
Conference or Workshop Item
||© 2010 The authors
||bounded rationality, tacit knowledge, codifiable knowledge, code, vertical communication, horizontal communication, organizational architecture, decision bias
|Library of Congress subject classification:
||H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
|Journal of Economic Literature Classification System:
||D - Microeconomics > D2 - Production and Organizations
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics
||Departments > Economics
Departments > Management
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Collections > Economists Online
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