[skybrian]

There is a bit of a puzzle because many large corporations do pretty well with hierarchical planning and competition involves lots of duplicate effort. The markets also seem to encourage centralization for economy of scale? (Consider big tech, the airline industry, and index funds.)

[drdeca]

I often wonder if there could be a feasible system by which things inside a large company could be run by a market-like thing, and whether that could end up using work more efficiently.

I hear about some part of a company requesting another part do some market research on some topic, and then just entirely disregard the results, when the market research department could have used that effort and time and money to do some other more useful market research that would have actually been used, and I wonder whether there could be some way to make sure that the requests to another department that something be done, have appropriate costs in some sense.

If one was better off by not requiring some other department do some work that doesn’t actually get used than if one does produce such a requirement for them, then presumably one would try to be less likely to produce such requirements, which seems desirable.

Is there a realistic feasible way to do this? I don’t know.

[skybrian]

Companies do experiment with this sometimes as part of the budget-making process, as well as internal competition. I haven't heard of any big wins though.

It seems better to take internal functions and open them up to outside customers, as the cloud computing companies do.