Rational Inattention and Organizational Focus

S-Tier
Journal: American Economic Review
Year: 2016
Volume: 106
Issue: 6
Pages: 1522-36

Authors (3)

Wouter Dessein (not in RePEc) Andrea Galeotti (London Business School (LBS)) Tano Santos (not in RePEc)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper studies optimal communication flows in organizations. A production process can be coordinated ex ante, by letting agents stick to a prespecified plan of action. Alternatively, agents may adapt to task-specific shocks, in which case tasks must be coordinated ex post, using communication. When attention is scarce, an optimal organization coordinates only a few tasks ex post. Those tasks are higher performing, more adaptive to the environment, and influential. Hence, scarce attention requires setting priorities, not just local optimization. Our results provide microfoundations for a central idea in the management literature that firms should focus on a limited set of core competencies.

Technical Details

RePEc Handle
repec:aea:aecrev:v:106:y:2016:i:6:p:1522-36
Journal Field
General
Author Count
3
Added to Database
2026-01-25