1036 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 
Some of the experimental results of small group dynamics are 
pertinent to this issue. If you decentralize the decisions in a group 
too far, so that each member of a team is required to obtain a lot 
of information from all the others in order to make his decisions, 
the efficiency of the whole team is diminished. It is pretty clear that 
the relationship between efficiency and centralization is not mono- 
tonic; you run into serious inefficiencies at both extremes. 
HAAVELMO 
It seems to me that part of Prof. ISARD’s argument has to do 
with the old question of whether errors committed by centralized 
decisions will be bigger than the errors of decentralized decisions 
because, allegedly, the errors in the latter case may tend to cancel 
each other. But the answer is not so simple. It will depend essen- 
tially on the kind of correlations that exist between the errors, and 
this again depends on the network of relations in the economic 
system. 
[SARD 
I am glad to have Professor DorRFMAN’s comments. They in- 
dicate to me that I have not been as clear as I should have been 
on a number of points. First, I meant to suggest that only in some 
situations and with respect to only some specific functions (e. g. 
planning on local education) would a highly decentralized system 
be desirable. In many other cases, such as in transportation plan- 
ning, a high degree of spatial decentralization of decision-making 
authority is highly undesirable. 
I also would subscribe to the view that in the operation of many 
groups the relationship between efficiency and centralization is not 
monotonic. Actually, I use a number of graphs to indicate the non- 
12] Isard - pag. 34