@TechReport{levitan99a,
  author =	 {Bennett Levitan and Jose Lobo and Stuart Kauffman
                  and Richard Schuler},
  title =	 {Optimal Organization Size in a Stochastic
                  Environment with Externalities},
  institution =	 {Santa Fe Institute},
  year =	 1999,
  abstract =	 {In this study, we explore the relationships among
                  group size, the extent of interactions with other
                  groups, and group performance in a stochastic
                  environment. We have developed a modeling framework
                  which allows the connections among the individual
                  members constitut- ing a group and the connections
                  between groups (externalities) to be tuned
                  independently. The search for improved group con
                  gurations is modeled as a random walk on a space of
                  possible con gurations whereby agents in a group
                  periodically have the opportunity to ac- cept or
                  reject random changes in their characteristics. By
                  controlling which groups have externalities with
                  which other groups, we can manipulate the topology
                  of the problem the web of interactions within and
                  between groups. We present numerical results showing
                  that optimal group size relates to the magnitude of
                  externalities and the length of the search
                  period. Our main result suggests that for short
                  search periods, large organizations perform best,
                  while for longer time horizons, the advantage
                  accrues to small sized groups with a small number of
                  (but not no) externalities. However, over these long
                  time horizons, as the extent of externalities
                  increases, modest increases in group size enhances
                  performance. Under all circumstances, organizations
                  that perform best border on a regime of chaotic
                  behavior. The results have applications at both the
                  micro-scale for the size and structure of production
                  units and at the macro-level for understanding the
                  relationships between groups and communities in a
                  hierarchy of market networks.},
  url =		 {http://jmvidal.cse.sc.edu/library/levitan99a.ps}
}