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The Architecture of Economic Systems: Hierarchies and Polyarchies

Stiglitz, Joseph E.; Sah, Raaj Kumar

This paper presents some new ways of looking at economic systems and organizations. Individuals' judgments entail errors; they sometimes reject good projects and accept bad projects (or ideas). The architecture of an economic system (i.e., how the decision-making units are organized together within a system, who gathers what information, and who communicates what with whom) affects the errors made by individuals within the system, as well as how those errors are aggregated.



Also Published In

American Economic Review

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Published Here
April 29, 2013
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