The Theory of two-level planning (alternatively, Kornai–Liptak decomposition) is a method that decomposes large problems of linear optimization into sub-problems. This decomposition simplifies the solution of the overall problem. The method also models a method of coordinating economic-decisions so that decentralized firms behave so as to produce a global optimum. It was introduced by the Hungarian economist János Kornai and the mathematician Tamás Lipták in 1965. It is an alternative to Dantzig-Wolfe decomposition.