The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Apr, 1967, Volume 35, Issue 2
https://doi.org/0012-9682(196704)35:2<294:ECTCDW>2.0.CO;2-U
p. 294-320
A. Charnes, K. O. Kortanek, R. W. Clower
The theory of economic models of decentralization is developed from a point of view quite different from the virtual planning phases of economic systems as displayed by market mechanism type procedures. The Central unit transmits appropriate information to each divisional unit which then acts (commits resources) according to optimization with respect to variables under its control. Our theory presents a natural hierarchy of coherently decentralized systems which is based on the increasing amounts of information which are to be transmitted to divisional units for proper decentralized decision making. In general, this information involves more than prices alone and the notion of preemptive goals is introduced for this purpose by means of examining dual convex programming problems. Employing our precise specifications, uniqueness of divisional optima (in contrast to certain trivial cases of decentralization) is not required. Thus, additional flexibility is available to divisions without violating company goals. Further we show that our procedure is a robust one in the sense that approximate fulfillment of the preemptive goals, e.g., non-optimal but close to optimal divisional solutions, results in small deviations from optimal profit.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
