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(.): optimal delegation of authority, multioutput cost functions
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(.): We minimize a multioutput quadratic cost function by choosing optimal delegation of authority (DoA). DoA means distribution of management actions needed for a production subsystem between managers with complicated duplication of each others efforts. Formally this problem is equivalent to optimization of a production volume distribution between firms with complicated exchange of products and multioutput cost functions. We prove analytical results and use them to develop and test an efficient algorithm, which solves the optimal delegation problem with a small number of iterations.
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