Decisionmaking by hierarchies of discordant agents
 Xiaotie Deng,
 Christos Papadimitriou
 … show all 2 hide
Abstract
We study the following decisionmaking scenario: A linear program is solved by a set of agents arranged hierarchically in a tree, where each agent decides the level of certain variables, and has a distinct objective function, known to all agents. Authority is reflected in two ways: Agents higher in the tree set their variables first; and agents that are siblings in the tree resolve their game by focusing on the Nash equilibrium that is optimum for the agent above them. We give a necessary and sufficient condition for such a hierarchy to be efficient (i.e., to have perfect coordination, to ultimately optimize the objective of the firm). We study problems related to designing a hierarchy (assigning decision makers to positions in the tree) in order to achieve efficiency or otherwise optimize coordination.
 Cho, I.K., Kreps, D. (1987) Signaling Games and Stable Equilibria. Quarterly Journal of Economics 102: pp. 179221
 G.B, (1963) Linear Programming and Extensions. Princeton University Press, Princeton
 J. Geanakoplos, P. Milgrom ”A theory of hierarchies based on limited managerial attention” J. of the Japanese and Intern. Economics, 5, pp. 205–225.
 Jeroslow, R.G. (1985) The polynomial hierarchy and a simple model for competitive analysis. Mathematical Programming 32: pp. 14664
 Kohlberg, E., Mertens, J. F. (1986) On the Strategic Stability of Equilibria. Econometrica 84: pp. 10031037
 D. M. Kreps ”A course in microeconomic theory”, chapter 18, Princeton, 1990.
 Kreps, D., Wilson, R. (1982) Sequential Equilibria. Econometrica 50: pp. 863894
 T. Marschak ”On economies of scope in communication,” Economic Design, 1, 4, 1995.
 J. March, and H. Simon, Organizations, Wiley, 1958.
 Papadimitriou, C. H. (1994) Computational Complexity. AddisonWelsley Publishing Company, Don Mills, Ontario
 A. Prat ”Hierarchies of Processors with endogenous capacity,” Stanford manuscript, 1996.
 C. H. Papadimitriou, and M. Yannakakis, “Linear Programming with a Matrix,” In Proceedings of the TwentyFifth Annual ACM Symposium on Theory of Computing, pp.121–129, San Diego, California, 16–18 May 1993.
 R. Radner, and T. van Zandt, “Information processing in Firms and Returns to Scale,” Annals d'Economie et de Statitique, No.25/26, pp.265–298, 1992.
 Schelling, T.C. (1963) The Strategy of Conflict. Oxford University Press, New York
 Selten, R. (1975) Reexamination of the Perfectness Concept for Equilibrium Points in Extensive Games. International Journal of Game Theory 4: pp. 2555
 Sleator, D. D., Tarjan, R. E. (1985) Amortized efficiency of list update and paging rules. Communications of the ACM 28: pp. 202208
 Title
 Decisionmaking by hierarchies of discordant agents
 Book Title
 Algorithms and Computation
 Book Subtitle
 8th International Symposium, ISAAC '97 Singapore, December 17–19, 1997 Proceedings
 Pages
 pp 183192
 Copyright
 1997
 DOI
 10.1007/3540638903_21
 Print ISBN
 9783540638902
 Online ISBN
 9783540696629
 Series Title
 Lecture Notes in Computer Science
 Series Volume
 1350
 Series ISSN
 03029743
 Publisher
 Springer Berlin Heidelberg
 Copyright Holder
 SpringerVerlag
 Additional Links
 Topics
 Industry Sectors
 eBook Packages
 Editors
 Authors

 Xiaotie Deng ^{(1)}
 Christos Papadimitriou ^{(2)}
 Author Affiliations

 1. Department of Computer Science, City University of Hong Kong, Kowloon, Hong Kong
 2. Division of Computer Science, U. C. Berkeley, 94720, Berkeley, CA
Continue reading...
To view the rest of this content please follow the download PDF link above.