Evolving Information Processing Organizations

The organization of information processing resources is a central question in economic, organizational, and computation theory. Recent work by Radner (1992) and others has developed a simple theoretical framework and some useful formal mathematical results about the behavior of such systems. Here, we follow a complementary computational approach that allows us to pursue questions concerning the impact of coordination and various exogenous conditions facing the organization. We find that organizations demonstrate “order for free,” that is, given a simple structural framework and a set of standard operating procedures, even randomly generated organizations imply well-defined patterns of behavior. Using a genetic algorithm, we also show that simple evolutionary processes allow organizations to “learn” better structures.