Hierarchy, Size and Environmental Uncertainty |
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administrative staff aggregate information Assume calculate changing environment class of policies communication costs comparative statics computation model Consider hierarchies Consider PRAMs converges decentralized information processing decision problem decision procedure decreasing differences decreasing volatility FIGURE design problem Email environment changes environmental volatility firm periodically gathers forecast gather and aggregate gathers a sample Goswell Road Graph shows sample hierarchies with recall hierarchies without recall increasing resp interval k dotted Labour Economics log o² log2 log₂ scale logo2 Loss Aversion manager who processes managerial cost managerial size managerial staff managerial wage managers are costless mean-squared error minimize natural scale NUMERICAL TEST observation each period optimal hierarchy Orbay parameters partial result planning cycle policies without recall policy with recall processes one observation Proposition Radner random walk read and aggregate sample and computes Sampling error sampling interval span limit stationary hierarchies stochastic process submodular subscription takes one period trade-off values www.cepr.org Zandt ΣΡ