A Role for Instructions

39 Pages Posted: 17 May 2005

See all articles by Irene Valsecchi

Irene Valsecchi

University of Milano-Bicocca, Department of Statistics; University of Milan - Department of Business Policy and Economics; Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Date Written: May 2005

Abstract

The paper is concerned with instructions as a way of setting premises for subsequent decisions in models of teams à la Marschak-Radner, under information diversification. The paper suggests that instructions can bridge people's differences in knowledge: they do not require mutual understanding between the sender and the receiver as other forms of communication do. In particular, the knowledge of both the team payoff function and the team organisation can be ordered according to hierarchical ranks. First, the paper shows the equivalence between commands and communication in Marschak and Radner (1972). Second, it derives the requirements in terms of knowledge of the members that follow from given structures of task assignment, information diversification and message flows. Hierarchical ranks are shown to correspond to different degrees of intelligibility of the members with respect to the team operations.

Keywords: Instructions, Hierarchy, Knowledge, Decentralisation

JEL Classification: D23, L23, M11

Suggested Citation

Valsecchi, Irene, A Role for Instructions (May 2005). FEEM Working Paper No. 62.05, Available at SSRN: https://ssrn.com/abstract=717441 or http://dx.doi.org/10.2139/ssrn.717441

Irene Valsecchi (Contact Author)

University of Milano-Bicocca, Department of Statistics ( email )

Via Bicocca degli Arcimboldi, 8
I-20126 Milano
Italy

University of Milan - Department of Business Policy and Economics ( email )

Milano, I-20122
Italy
0039-2-76074511 (Phone)
0039-2-76009695 (Fax)

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

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