Designing an Organization in a Hypothesis Testing Framework
MASSACHUSETTS INST OF TECH CAMBRIDGE LAB FOR INFORMATION AND DECISION SYSTEMS
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This paper deals with problems of quantitative organizational design. We endorse the development of a Normative Decision Theory for the quantitative study of distributed organizations. We suggest that Hypothesis Testing is an appropriate paradigm for this framework. To demonstrate this, we present numerical interests for a team consisting of two decision makers DMs which performs binary hypothesis testing and study the effect of different communication protocols we show that near-optimal performance can be achieved with few communications bits. We summarize some other organizational design problems we have studied and present some tentative conclusions and suggestions for future research.
- Administration and Management
- Statistics and Probability