The paper studies information processing imperfections in a fully rational decision-making network. It is shown that imperfect information transmission and imperfect information acquisition in a multi-stage selection game yield information overload. The paper analyses the mechanisms responsible for a seeming bounded rational behavior of the network and shows their similarities and distinctions. Two special cases of filtering selection procedures are investigated, where the overload takes its most limiting forms. The model developed in the paper can be applied both to organizations and to individuals. It can serve as a rational foundation for bounded rationality.

bounded rationality, information overload, multistage selection, screening
Analysis of Collective Decision-Making: General (jel D70), Information, Knowledge, and Uncertainty: General (jel D80)
hdl.handle.net/1765/6623
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Ficco, S.S, & Karamychev, V.A. (2004). Information Overload in Multi-Stage Selection Procedures (No. TI 04-077/1). Tinbergen Institute Discussion Paper Series. Retrieved from http://hdl.handle.net/1765/6623