Information Flows and Networks III

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Informational Choking In A Hierarchy

Note: in order to run the simulation referred to in this slide, go here, to the Java Applet version. You will be directed to download the latest version of the Java plug-in.

To your left, an organization consisting of 15 individuals is arranged into a traditional hierarchical network. The individuals' green color signifies the fact that initially, all of their resources are devoted to production, rather than time-consuming information transfer. At this point, the Firm Output is at its maximum - 15 units per time step.

Press "Go" once. A path between some two agents lights up in blue. You are observing the incidence of an "ambiguity event", modeled in the spirit of Duncan Watts' discussion in his book "Six Degrees: The Science Of A Connected Age" (p. 278-289). We interpret it as an informational inconsistency that occurs between the agents at the two ends of the blue path. The path was found to be the shortest one possible, as the agents conspire to exchange the necessary information. Dealing with such inconsistencies is crucial for the firm's functioning, which causes all the nodes along this shortest path to devote a portion of their limited resources to the ambiguity's resolution. Click "Go" once again to see this happen. You should notice that a small portion of the corresponding agents' resources has been diverted from production (green sector of the pie) to information transfer (red sector).

By the 11th click of the "Go" button, the simulation starts progressing in 100-step jumps, and soon it becomes obvious that the nodes at the top of the hierarchy are very popular as information conduits, and get choked with its flow very quickly. In reality, this would translate to poor transfer of information by the overloaded individuals, which would in turn have a detrimental effect on the firm's productivity. Accordingly, our Firm Output measure takes into account both the positive contribution of the green production sectors in every agent's resource pie, and the negative influence of informational overload.

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