| The internal economies of complex organizations, such as the firm in the private sector and the bureau in the public sector, produce decisions which affect the allocation of resources in the economy. The economics literature on internal organization is quite fragmented due to the wide variety of assumptions made concerning the role of imperfect information, imperfect decision-making, and the role of organizational structure. The framework developed in this thesis is based on the work of Heiner on fallibility of human decision-makers and the work of Sah and Stiglitz on decision architectures. The two models are combined to compare the performance of hierarchies, polyarchies, and committees under alternative property right regimes, with respect to minimizing resource allocation errors. |
