We show that any communication finding a Pareto efficient allocation in a private-information economy must also discover supporting Lindahl prices. In particular, efficient allocation of L indivisible objects requires naming a price for each of the 2 L ¡1 bundles. Furthermore, exponential communication in L is needed just to ensure a higher share of surplus than that realized by auctioning all items as a bundle, or even a higher expected surplus (for some probability distribution over valuations). When the valuations are submodular, efficiency still requires exponential communication (and fully polynomial approximation is impossible). When the objects are homogeneous, arbitrarily good approximation is obtained using exponentially less communication than that needed for exact efficiency.

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Despite the importance to researchers, managers, and policy makers of how information technology (IT) contributes to organizational performance, there is uncertainty and debate about what we know and don’t know. A review of the literature reveals that studies examining the association between information technology and organizational performance are divergent in how they conceptualize key constructs and their interrelationships. We develop a model of IT business value based on the resource-based view of the firm that integrates the various strands of research into a single framework. We apply the integrative model to synthesize what is known about IT business value and guide future research by developing propositions and suggesting a research agenda. A principal finding is that IT is valuable, but the extent and dimensions are dependent upon internal and external factors, including complementary organizational resources of the firm and its trading partners, as well as the competitive and macro environment. Our analysis provides a blueprint to guide future research and facilitate knowledge accumulation and creation concerning the organizational performance impacts of information technology.

... of the leaders in the formalist branch of the New Institutional Economics, made the following observation. ”The incentive based transaction costs theory has been made to carry too much of the weight of explanation in the theory of organizations. We expect competing and complementary theories to emerge- theories that are founded on economizing on bounded rationality and that pay more attention to changing technology and to evolutionary considerations. ” This paper argues that such theories are now emerging. We survey and synthesize a developing perspective that we label the ”capabilities ” view. We argue that this view complements incentive-based theory (1) by considering the problems of imperfect knowledge in production as well as in governance and (2) by considering issues not only of incentive alignment but also of qualitative coordination among holders of specialized, distributed, and often tacit knowledge. Also, focusing on capabilities brings to the fore the idea that routines and similar rule-based forms of institutionalized knowledge may be important building blocks of economic organization. As a result, the capabilities approach arguably connects more fully with the New Institutional

Permission is hereby granted to make and distribute verbatim copies of this document without royalty or fee. Permission is granted to quote excerpts from this documented provided the original source is properly cited. ii When separately written programs are composed so that they may cooperate, they may instead destructively interfere in unanticipated ways. These hazards limit the scale and functionality of the software systems we can successfully compose. This dissertation presents a framework for enabling those interactions between components needed for the cooperation we intend, while minimizing the hazards of destructive interference. Great progress on the composition problem has been made within the object paradigm, chiefly in the context of sequential, single-machine programming among benign components. We show how to extend this success to support robust composition of concurrent and potentially malicious components distributed over potentially malicious machines. We present E, a distributed, persistent, secure programming language, and CapDesk, a virus-safe desktop built in E, as embodiments of the techniques we explain.

We analyze the communication complexity of surplus-maximizing allocations. We study both the continuous and discrete models of communication, measuring its complexity with the dimensionality of the message space and the number of transmitted bits, respectively. In both cases, we offer a lower bound on the amount of communication. This bound is applied to the problem of allocating L heterogeneous objects among N agents, whose valuations are (i) unrestricted, (ii) submodular, or (iii) homogeneous in objects. In cases (i) and (ii), efficiency requires exponential communication in L. Furthermore, in case (i), polynomial communication in L cannot achieve a higher surplus than selling all objects as a bundle. On the other hand, in case (iii), exact efficiency requires the transmission of L numbers, but arbitrarily close approximation is achieved with only O(log L) bits. When a Walrasian equilibrium with per-item prices exists, efficiency is achieved with deterministic communication that is polynomial in L.

Participants in prediction markets such as the Iowa Electronic Markets trade all-or-nothing contracts that pay a dollar if and only if specified future events occur. Researchers engaged in empirical study of prediction markets have argued broadly that equilibrium prices of the contracts traded are “market probabilities ” that the specified events will occur. This paper shows that if traders are risk-neutral price takers with heterogenous beliefs, the price of a contract in a prediction market reveals nothing about the dispersion of traders ’ beliefs and partially identifies the central tendency of beliefs. Most persons have beliefs higher than price when price is above 0.5, and most have beliefs lower than price when price is below 0.5. The mean belief of traders lies in an interval whose midpoint is the equilibrium price. These findings persist even if traders use price data to revise their beliefs in plausible ways.

Despite more than a decade of experimental work in multi-robot systems, important theoretical aspects of multi-robot coordination mechanisms have, to date, been largely untreated. To address this issue, we focus on the problem of multi-robot task allocation (MRTA). Most work on MRTA has been ad hoc and empirical, with many coordination architectures having been proposed and validated in a proof-of-concept fashion, but infrequently analyzed. With the goal of bringing objective grounding to this important area of research, we present a formal study of MRTA problems. A domain-independent taxonomy of MRTA problems is given, and it is shown how many such problems can be viewed as instances of other, well-studied, optimization problems. We demonstrate how relevant theory from operations research and combinatorial optimization can be used for analysis and greater understanding of existing approaches to task allocation, and show how the same theory can be used in the synthesis of new approaches.

Austrian economics has been important to the development of modern economics, but its role in current practice is much diminished. The neoclassical approach dominates today’s thinking. Many Austrians bemoan this state of affairs; most neoclassical economists just ignore it. But Austrian and neoclassical economics aren’t mutually exclusive. Each represents a distinctive point of view, although with little meaningful intellectual exchange between them these days. This is unfortunate. Many different concepts are associated with both Austrian and neoclassical economics. To concentrate on where the most exchange of ideas might occur, I am concerned about those aspects of Austrian economics primarily dealing with the process of competition, and that portion of neoclassical economics primarily dealing with the determination of economic equilibrium. This, in a nutshell, is the main intellectual difference between them. Some consequences of this difference are discussed in what follows. I hope to show that mutually advantageous gains from trade exist. Austrian economics offers a valuable perspective of the economy as an evolutionary process, akin to biological evolution, with entrepreneurial activities representing the main instruments of change. It is primarily a macroeconomic theory of the economy as a whole, with keen insights on the nature of decentralization and the process of competition that deserve more attention. Neoclassical economics offers a microeconomic theory of economic behavior that is especially useful for analyzing specific economic problems and for orienting analysis around more sharply described empirical phenomena and data.

We present a detailed model of collaboration in communities of practice and we examine its dynamical consequences for the group as a whole. We establish the existence of a novel mechanism that allows the community to naturally adapt to growth, specialization, or changes in the environment without the need for central controls. This mechanism relies on the appearance of a dynamical instability that initates an exploration of novel interactions, eventually leading to higher performance for the community as a whole. 1