Development Economics X Paper Model Thirty-One
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This article develops a theoretical framework for understanding analysis paralysis in organizations and decision-making bodies. We model agents with time-dependent decision utilities who are connected through an organizational structure and must choose both the timing and quality of their decisions under uncertainty. The key innovation is a non-monotonic relationship between analysis time and decision quality, coupled with strategic complementarities in deliberation choices. We show that excessive analysis is contagious when it imposes delay costs on others, creating a ”paralysis multiplier” that amplifies through organizational networks. The model generates multiple equilibria characterized by different collective deliberation regimes, ranging from snap judgments to perpetual analysis. In hierarchical structures, we demonstrate that analysis patterns propagate downward, with subordinates’ deliberation time increasing in their superior’s, leading to potential organizational gridlock. We identify a fundamental tradeoff between decision quality and timeliness, showing how standard organizational incentives can
push agents beyond the optimal deliberation threshold. The framework also yields insights for organizational design, highlighting how different information architectures and incentive structures affect the prevalence of analysis paralysis. Applications to committee decision-making and corporate governance illustrate how institutional features can either mitigate or exacerbate collective overthinking
Opoku-Agyemang, Kweku (2025). "The Economics of Analysis Paralysis: A Framework for Organizational Decision-Making." Development Economics Paper Model Thirty-One.
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