The Optimal Design of Fallible Organizations: Invariance of Optimal Decision Criterion and Uniqueness of Hierarchy and Polyarchy Structures

We present a general framework to study the project selection problem in an organization of fallible decision-makers. We show that when the organizational size and the majority rule for project acceptance are optimized simultaneously, the optimal quality of decision-making, as determined by the decision criterion, is invariant, and depends only on the expertise of decision-makers. This result clarifies that the circumstances under which the decision-making quality varies with the organizational structure are situations where the organizational size or majority rule is restricted from reaching the optimal level. Moreover, in contrast to earlier findings in the literature that the hierarchy and the polyarchy are suboptimal structures, we show that when the size, structure and decision criterion are simultaneously optimized, the hierarchy and the polyarchy are in fact the only possible optimal organizational structures when decision-making costs are present.organizational decision-making, structure, quality, hierarchy, polyarchy

Venture capital and economic growth: An industry overview and Singapore's experience

Published in Singapore Economic Review. 47, (2), 243-267, https://doi.org/10.1142/S0217590802000535</p

Congestion Control and Vehicle Ownership Restriction: The Choice of an Optimal Quota Policy

Published in Journal of Transport Economics and Policy, 2004, https://www.jstor.org/stable/20173063</p

The Optimal Design of Fallible Organizations: Invariance of Optimal Decision Criterion and Uniqueness of Hierarchy and Polyarchy Structures

Published in Social Choice and Welfare, 2005, 25 (1), pp. 207-220. https://doi.org/10.1007/s00355-005-0055-1</p

Fallibility and Sequential Decision-Making

National University of Singapor

Optimal Sequential Decision Architectures and the Robustness of Hierarchies and Polyarchies

Published in Social Choice and Welfare, 2005, 24 (3), 397-411. https://doi.org/10.1007/s00355-003-0304-0</p