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Title: Balancedness of Real-Time Hierarchical Resource Allocation

Author(s): Timothy Van Zandt

Publication Date: March 2004

Keyword(s): bounded rationality, decentralization, hierarchies, real-time computation and resource allocation

Programme Area(s): Industrial Organization

Abstract: We take the hierarchical resource allocation model in Van Zandt (2003a) and derive a simpler, reduced-form model of balanced hierarchies. This model uses continuous approximations; we derive bounds on the errors due to these approximations. We then give results that indicate that optimal hierarchies in the general model of are approximately balanced. In particular, we show that aggregation should be balanced if the hierarchical structure is balanced, and we show the hierarchical structure should be balanced if aggregation is balanced.

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Bibliographic Reference

Van Zandt, T. 2004. 'Balancedness of Real-Time Hierarchical Resource Allocation'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4276