"Communication and Coordination in Organizations" (in Japanese)

Abstract

This paper analyzes a model of coordination where two agents attempt to coordinate their actions through communication. One agent (Sender) is engaged in finding the true state of nature in a stochastic environment and the action that best fits the state. The other agent (Receiver) in turn tries to ``understand'' the Sender's message and chooses his own action. Since the communication succeeds only probilistically, so does the coordination. In our model, two different modes of coordination are identified: the integral-type coordination based on the communication of soft information and the default-type coordination based on the predetermined default value. We find that the agents might choose the latter mode of coordination when the cost arising from the failed communication is high relative to the benefit from coordinating on the state-contingent best actions. Applications to the economics of organization are also discussed.