Abstract
Markets have always taken a prominent place in Professor Andrew Whinston’s research. In his earlier work, for example, he concentrated on finding conditions under which resources can be allocated in a non-convex economy, although economists had raised questions about the applicability of markets in such an economy. In later research, he also applied the market idea to non-conventional application areas. Some of the most influential research is in the area of developing models and methods for real-time problem solving and resource management in computer networks. His most recent research, recognizing the potential opportunities the networked environment provides to companies, has taken the market idea to the internal economy of organizations: how to design IT-supported coordination systems for organizational resource allocation. In this essay, we discuss some issues that differentiate IT-supported internal markets from IT-supported commerce between different companies. We then draw on recent research by Dr. Whinston and his colleagues on market mechanisms to illustrate how such systems might be designed.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Adler, P. (2001) “Market, hierarchy, and trust: the knowledge economy and the future of capitalism.” Organization Science. March-April. 12(2): 215–234.
Arrow, K. (1962) “Economic Welfare and the Allocation of Resources for Invention,” in The rate and direction of inventive activity: Economic and Social factors. Princeton University Press, Princeton NJ, 609–625.
Arrow, K. (1963) Social Choice and Individual Values. 2nd ed. New York: Wiley.
Ba, S., J. Stallaert, and A. B. Whinston (2001) “Optimal investment in knowledge within a firm using a market mechanism.” Forthcoming in Management Science.
Barua, A., S. Lee, and A. B. Whinston (1996) “Calculus of reengineering,” Information Systems Research, 7(4): 409–428.
Bayers, C. (2000) “The Bot.Com future: capitalist econstruction.” Wired. March. Pg. 210–219.
Benbasat, I., and L.H. Lim (1993) “The effects of group, task, context, and technology variables on the usefulness of group support systems: a meta-analysis of experimental studies.” Small Group Research, 24,4: 430–462.
Briggs, R., J. Nunamaker, and R. Sprague (1998) “1001 unanswered research questions in GSS.” Journal of Management Information Systems. 14(3): 3–21.
Buchanan, J.M. and Tullock (1962) The Calculus of Consent, Ann Arbor, University of Michigan Press.
Burk, K., and K. Aytes (1998) “A longitudinal analysis of the effects of media richness on cohesion development and process satisfaction in computer-supported workgroups.” Proceedings of the Thirty-First Hawaii International Conference on Systems Sciences, 1 : 135–144.
Chandler, A. Jr. (1962) Strategy and Structure: Chapters in the History of the American Industrial Enterprise, MIT Press, Cambridge.
Chen, H.; P. Hsu, R. Orwig, L. Hoopes, and J. Nunamaker (1994) “Automatic concept classification of text from electronic meetings.” Communications of the ACM. 37 (10): 56–72.
Clarke, E.H. (1971) “Multipart pricing of public goods,” Public Choice 11, 17–33.
Davey, A., and D. Olson (1998) “Multiple criteria decision making models in group decision support.” Group Decision and Negotiation, 7, 1: 55–75.
Dennis, A.R., and J.S. Valacich (1994) “Group, sub-group, and nominal group idea generation: new rules for a new media?” Journal of Management, 20, 4: 723–736.
DeSanctis, G. L. and R. B. Gallupe (1987) “A foundation for the study of group decision support systems,” Management Science (33:5). pp. 589–609.
Ellis, C.A.; G.L.Rein, and S.L. Jarvenpaa (1990) “Nick experimentation: selected results concerning effectiveness of meeting support technology.” Journal of Management Information Systems, 6, 3: 7–24.
Fan, M., J. Stallaert, and A. B. Whinston (2000) “Decentralized mechanism design for supply chain organizations using an auction market.” Forthcoming in Information Systems Research.
Fjermestad, J. and S. Hiltz (1998) “An assessment of group support systems experiment research: Methodology and results.” Journal of Management Information Systems. 15(3): 7–149.
Galbraith, J., (1973) “Designing complex organizations,” Addison-Wesley Publishing Company, City, MA.
Gallupe, R.B.; G DeSanctis, and G.W. Dickson (1998) “Computer-based support for group problem-finding: an experimental investigation.” MIS Quarterly, 12, 2: 277–296.
Gavish, B. and J. H. Gerdes Jr. (1997) “Voting mechanisms and their implications in a GDSS environment.” Annals of Operations Research, 71, pp. 41–74.
Groves, T. (1973) “Incentives in teams.” Econometrica 41,617–631.
Groves, T. and M. Loeb (1979) “Incentives in a divisionalized firm.” Management Science 25, 221–230.
Gupta, A., B. Jukic, D. O. Stahl, and A. B. Whinston (2000) “Extracting Consumers’ Private Information for Implementing Incentive-Compatible Internet Traffic Pricing.” Journal of Management Information Systems, Vol. 17, No. 1, Summer 2000, pp. 9–29.
Gupta, A., D. O. Stahl, and A. B. Whinston (1997) “A Decentralized Approach to Estimate Activity Based Costs and Near-Optimal Resource Allocation in Flexible Manufacturing Systems.” International Journal of Flexible Manufacturing Systems, Vol. 9, No. 2, April, pp. 167–194.
Halal, W.E. (1994) “From hierarchy to enterprise: Internal markets are the new foundation of management,” Academy of Management Executive 8, 69–83.
Halal, W.E. (1998) “The infinite resource: creating and leading the knowledge enterprise,” Jossey-Bass Publishers.
Halal, W.E., A. Geranmayeh and J. Pourdehand (1993) “Internal markets: bringing the power of free enterprise inside your organization.” John Wiley and Sons.
Hayek, F. (1945) “The use of knowledge in society,” American Economic Review 35, pp. 519–530.
Hurwicz, L., (1972) “On informationally decentralized systems.” in: Decision and Organization, ed. by C.B. McGuire and R. Radner, North Holland. Amsterdam.
Jensen, M. C. (1998) Foundations of organizational strategy. Harvard University Press.
Konana, P., A. Gupta, and A. B. Whinston (2000) “Integrating User Preferences and Real-Time Workload in Information Services.” Information Systems Research, Vol. 11, No. 2, June 2000, pp. 177–196.
Ledyard, J. (1989) “Incentive compatibility.” In J. Eatwell, M. Milgate, and P. Newman (eds.), Allocation, Information and Markets. New York: Norton, pp. 141–151.
Mas-Colell, A., M. D. Whinston and J. R. Green (1995), Microeconomic Theory, Oxford University Press.
McGrath, J.E., and H. Arrow (1996) “Introduction: the JEMCO 2 study of time, technology and groups.” Computer Supported Cooperative Work, 4, 2:107–126
Milgrom, P. and J. Roberts (1990) “Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities,” Econometrica, 58(6): 1255–1277.
Milgrom, P. and J. Roberts (1992) “Economics, Organization and Management,” Prentice-Hall.
Mintzberg, H. (1979) The structuring of organizations: a synthesis of the research. Prentice Hall. Englewood Cliffs, N.J.
Moore, J., A. B. Whinston, and J. S. Wu (1972) “Resource Allocation in a Non-Convex Economy.” Review of Economic Studies, July 1972.
Myerson, R.B. (1989) “Mechanism design.” In J. Eahtwell, M. Milgate, and P. Newman (eds.), Allocation. Information and Markets. New York: Norton, pp. 191–206.
Poppo, L. (1995) “Influence Activities and Strategic Coordination: Two Distinctions of Internal and External Markets,” Management Science 41, pp. 1845–1859.
Radner, R. (1986) “The Internal Economy of Large Firms,” The Economic Journal 96, Supplement: Conference Papers, pp. 1–22.
Topkis, D.M. (1978) “Minimizing a Submodular Function on a Lattice,” Operations Research, April 1978: 305–321.
Whinston, A. B. (1962) “Control and Coordination of Complex Economic and Managerial Systems.” Ph.D. Dissertation. Carnegie-Mellon University.
Zenger, T.R. and W.S. Hesterly (1997) “The Disaggregation of Corporations: Selective Intervention, High-powered Incentives, and Molecular Units,” Organization Science 8, pp. 209–222.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Springer Science+Business Media New York
About this chapter
Cite this chapter
Ba, S., Stallaert, J. (2002). Designing IT-Supported Market Mechanisms for Organizational Coordination. In: Holsapple, C., Jacob, V., Rao, H.R., Chaudhury, A., Agrawal, M. (eds) Business Modelling. Operations Research/Computer Science Interfaces Series, vol 16. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-0893-9_11
Download citation
DOI: https://doi.org/10.1007/978-1-4615-0893-9_11
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-5291-4
Online ISBN: 978-1-4615-0893-9
eBook Packages: Springer Book Archive