The Optimal Design of Fallible Organizations: Invariance of Optimal Decision Criterion and Uniqueness of Hierarchy and Polyarchy Structures

• Main Author: KOH, Winston T. H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Decision Criterion; Majority Rule; Organizational Size; Project Selection; Investment Environment; Industrial Organization
• Online Access: https://ink.library.smu.edu.sg/soe_research/203; https://ink.library.smu.edu.sg/context/soe_research/article/1202/viewcontent/Optimal_design_of_fallible_organizations_2005.pdf
• Institution: Singapore Management University

We present a general framework to study the project selection problem in an organization of fallible decision-makers. We show that when the organizational size and the majority rule for project acceptance are optimized simultaneously, the optimal quality of decision-making, as determined by the deci...