Dr Umberto Garfagnini
Umberto received his undergraduate degree in Economics and Finance from Bocconi University in 2005 and his PhD in Managerial Economics and Strategy from the Kellogg School of Management in 2011. He joined the University of Surrey as a full-time lecturer in August 2015.
Microeconomic theory, information economics, experimental economics
Exchange programme coordinator
ECO2049 - Financial Economics 1
ECOM020 - Microeconomics
outlook for further experimentation but decreases the value and the marginal value of experimentation in a longer term, resulting in less ambitious ?incremental? experimentation and in a reduced size of radical
experimentation. Incremental experimentation lowers the option value of similar technologies, which may spur a new wave of radical experimentation. However, experimentation eventually stagnates for all
parameters of the model.
The organization faces a trade-off between coordinating its decisions across
the divisions and meeting division-specific needs that are known only to the division
managers, who can communicate their private information through cheap talk. While
the results show close to optimal communication, we also find systematic deviations
from optimal behavior in how the communicated information is used. Specifically,
subjects? decisions show worse than predicted adaptation to the needs of the divisions
in decentralized organizations and worse than predicted coordination in centralized
organizations. We show that the observed deviations disappear when uncertainty
about the divisions? local needs is removed and discuss the possible underlying mechanisms.