Progress Report. 1981-1982.
STANFORD UNIV CA CENTER FOR RESEARCH ON ORGANIZATIONAL EFFICIENCY
Pagination or Media Count:
One series of studies has continued applying to topics in organizational theory the methods of the theory of games with incomplete information. A major theme of thes studies is the crucial role of information and timing in problems of decentralization and incentives. This subject has been addressed in both problems of intertemporal cooperation, and problems of competitive behavior in contexts of contracting and auctions. The first topic on Rational Motives for Cooperation, reviews the role of incomplete information in sustaining cooperative behavior in repeated plays of the Prisoners Dilemma game. The results indicate the sensitivity of much of the extant work on cooperation without enforcable contracts to the very strong common knowledge assumption that are imposed. The second topic, on Auctions and Bidding, reviews the dramatically successful synthesis that was accomplished in the past year by Milgrom and Weber. Their results, based on the theory of affiliated random variables, unifies much of what had been known in the theory of auctions and competitive bidding, and obtains several major extensions. In particular, they are able to rank the various auction forms in terms of the expected profit to the seller. The third topic, on Models of Reputation, reviews the accumulation of recent work on the role of reputations in explaining competitive behavior.
- Administration and Management
- Personnel Management and Labor Relations
- Statistics and Probability