Organizational Languages
Name
4278-03.pdf
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164.9 KB
Format
Adobe PDF
Checksum (MD5)
423a466d0ab3ff42b34f425011c46756
Author(s)
Wernerfelt, Birger
Date Issued
February 3, 2003
Series/Report no.
MIT Sloan School of Management Working Paper;4278-03
Abstract
The paper is concerned with communication within a team of players trying to
coordinate in response to information dispersed among them. The problem is
non-trivial because they cannot communicate all information instantaneously, but have
to send longer or shorter sequences of messages, using coarse codes. We focus on the
design of these codes and show that members may gain comaptibility advantages by
using identical codes, and that this can support the existence of several, more or less
efficient, symmetric equilibria. Asymmetric eqilibria exist if coordination across
different sets of members is of differing importance, and fewer symmetric equilibria
exist if the members' local environments are sufficiently heterogeneous. The results are
consistent with the stylized fact that firms differ even within industries, and that
coordination between divisions is harder than coordination inside divisions.
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