THE AGGREGATION OF ESTIMATES IN HIERARCHIAL ORGANIZATIONS

Abstract

This paper explores two issues in the formation of expectations in hierachically ordered organizations - the estimates of events made by individuals at one level and the coupling of these estimates to those made at the next level in the organization. Data from two field studies are used to illustrate the changes in risk bearing imposed by close coupling of estimates at two different levels and the potential reinforcement of bias in estimation which coupling may engender.