Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/221491
Authors: 
Poitevin, Michel
Year of Publication: 
1995
Series/Report no.: 
Discussion Paper No. 1135
Abstract: 
This paper studies the implications of non-commitment for organizational design. An organizational form must trade-off between the coordination benefits associated with the centralization of information and its associated costs in terms of renegotiation. The analysis makes precise what these benefits and costs are. First, I characterize renegotiation-proof allocations for organizational forms that differ in the amount of decentralization that they support. Second, I compare these different organizational forms. The analysis shown that (1) complete decentralization of decision-making is always weakly dominated by a more centralized structures when information is dispersed in the organization; (2) the player with the most important or relevant information should be the decision-maker.
Document Type: 
Working Paper

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