The architecture of economic systems:
Hierarchies and polyarchies Raaj Kumar Sah and Joseph E. Stiglitz American Economic Review, Volume 76, Number 4, September 1986, pages 716-727. Click here to download the PDF of the paper ABSTRACT This paper presents some new ways of looking at economics systems and organizations. Individuals’ judgments entail errors; they sometimes reject good projects and accept bad projects (or ideas). The architecture of an economic systems (i.e., how the decision-making units are organized together within a system, who gathers what information, and who communicates what with whom) affects the errors made by individuals within the system, as well as how those errors are aggregated. Reprinted in: Personnel economics, edited by Edward P. Lazear and Robert McNabb. In: The international library of critical writings in economics, edited by Mark Blaug. Edward Elgar, Cheltenham, UK, 2004. Welfare economics, Volume 1, edited by William J. Baumol and Charles A. Wilson. In: The international library of critical writings in economics, edited by Mark Blaug. Edward Elgar, Cheltenham, UK, 2001 . Previous working version include: “The architecture of economic systems: Hierarchies and polyarchies.” Yale University, School of Organization & Management. Economics of organization, Working paper series D, Working paper number 9. April 1985. “The architecture of economic systems: Hierarchies and polyarchies.” National Bureau of Economic Research, Cambridge, MA . NBER working paper series, Working paper number 1334. April 1984. |