Real-time decentralized information processing as a model of organizations with boundedly rational agents

This paper studies the properties of real-time decentralized information processing as a model of human information processing in organizations. Real-lime decentralized processing-which models the computation of decision rules in a temporal decision problem by members of an organization-captures both the cost of computation in terms of the members' time and the constraints imposed by computational delay on the use of recent information. Unlike a batch processing model, it has no single measure of delay because decisions are computed from data of heterogeneous lags. Furthermore, decentralization does not unambiguously reduce delay, because processing a message precludes processing current data.