This paper discusses the formation of organizational knowledge of boundedly rational Economic agents and studies the necessity of hierarchical coordination of economic agents. We consider a firm that consists of a management and N subordinated shops....

A computational economics model of managerial compensation is presented. Risk-averse managers are simulated, and shown to adopt more risk-taking under the influence of stock options. It is also shown that stock options can both help a new entrant compete in an established market; and can help...