The Firm as a Communication Network

Clicks: 3
ID: 303761
1994
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Abstract
This paper analyzes how organizations can minimize costs of processing and communicating information. Communication is costly because it takes time for an agent to absorb new information sent by others. Agents can reduce this time by specializing in the processing of particular types of information. When these returns to specialization outweigh costs of communication, it is efficient for several agents to collaborate within a firm. It is shown that efficient networks involve centralization, that individuals delegate tasks to subordinates only if they are overloaded, and that the number of transits to the top tends to be equalized across individual information items.
Reference Key
openalex_W2116982410 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Patrick Bolton, Mathias Dewatripont
Journal the quarterly journal of economics
Year 1994
DOI
10.2307/2118349
URL
https://doi.org/10.2307/2118349
Keywords Keywords not found

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