Abstract
The performance of total decentralization and total centralization (for which precise definitions are given) is studied in a general model of decision making for a linear class of decision-making situations. It is shown that the structure of information, the penalty for lack of local accuracy, the penalty for lack of coordination, and the stringency of the coordinating requirements are the important factors determining whether total decentralization performs better than total centralization or vice versa. The conclusions reached can be extended to, and are valid for, more complicated and realistic situations.
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