The gains from computer communication

The effects of providing communication channels among computer systems located at different sites are studied. It is shown that the maximum utility at every site with computer communication can be greater (or at least not less) than that without communication. This can be achieved in such a way that, with communication, each computer system is more specialized in processing transactions of the types in which the system has comparative advantage and mutually exchanges the processed transactions through communication channels; the utility here is assumed to depend on performance. It is shown, however, that growth in computing resources at a site toward a higher degree of specialization may sometimes lead to a decrease in the maximum utility at the site.