ABSTRACT
When an entity composed of a set of decision makers has a specific collective goal which is not the simple sum of the objectives of the individual decision makers and/or the decisions of one decision maker affect or are affected by the decisions of the other decision makers, the entity's goal wil l not be achieved unless the interdependencies of the decisions and their consequent impact on the collective goal are expressly taken into account. In many realistic settings, achieving the entity's goal through centralized decision making is a difficult, if not impossible, task. Centralization may be difficult because the entity may exert (or may wish to exert for motivational reasons) only limited control over the decision makers, information may be decentrally distributed and its redistribution may be limited by the capacity of information channels, and institutional or environmental restrictions may limit the transmission of proprietary information. In such situations decentralized decision making is a necessity.
