Expert decision-making: A Markovian approach to studying the agency problem

This paper considers the features of corporate management on the part of board of directors. This paper includes consideration of efficiency of decision-making, the resolution of conflicts be-tween shareholders, realizations of investment in the company. In the presented work are considered mutual relations between board of directors and shareholders, from the point of view of accepting of effective decisions. The author analyzes one of tools of motivation for board of directors, namely stock options as incentives for company executives which effective decisions help to make. Realiza-tion of stock options in the Russian legal realities at times is an inconvenient task. Besides, principal causes of infringement are considered from controlling shareholder: imperfection of the national corporate legislation, an inefficiency of governance from board of directors. The author notices that the company management is capable using the management powers, effectively to manage the com-pany, in due time to inform shareholders on forthcoming strategic business decisions. Thereby, al-lowing diligent to expect shareholders injurious moods from, first of all, majority shareholders and to permit corporate conflicts. The permission agency problem is reached by means of optimization of structure of the capital of the company. Thereby, the permission of an agency problem (at least its mitigation), will allow board of directors to make more effective decisions and also to promote in-vestment realization in the company. Eventually investors build the policy with the company on fi-duciary bases, giving a priority of that which copes strong management.

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The Division of Democratic Labor

In Our Name ◽

10.23943/princeton/9780691154619.003.0008 ◽

2012 ◽

Author(s):

Eric Beerbohm

Keyword(s):

Decision Making ◽

Cost Saving ◽

Moral Hazard ◽

Distributive Justice ◽

Thought Experiment ◽

Agency Problem ◽

Cognitive Strategies ◽

Representative Democracy ◽

Democratic Citizenship

This chapter proposes cost-saving cognitive strategies for citizens to exhibit their decision-making virtues economically. It shows how individual citizens can come to rely on credentialed experts to form and act upon empirical beliefs that bear upon their judgments of distributive justice. Before explaining how the horizontal division of democratic labor works, the chapter considers the structure of the agency problem of representative democracy as well as the intuition that complicity remains a moral hazard of democratic citizenship. It then presents a thought experiment that illustrates how demanding and disruptive our decision making would be in a plebiscitary democracy. It also discusses three principles that can help citizens reduce the decisional burdens of their office: the usability principle, the peer principle, and the triage principle. The chapter concludes by defending a companion principle whose aim is to give citizens guidance when they can offload their decision-making responsibilities.

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Reducing Agency Problem and Improving Organizational Value-Based Decision-Making Model of Inter-Organizational Strategic Alliance

Computational Economics ◽

10.4018/978-1-59140-649-5.ch015 ◽

2011 ◽

pp. 290-307

Author(s):

Tsai-Lung Liu ◽

Chia-Chen Kuo

Keyword(s):

Decision Making ◽

Intellectual Capital ◽

Strategic Alliance ◽

Negative Impact ◽

Agency Problem ◽

Agency Cost ◽

Core Knowledge ◽

Knowledge Based ◽

Decision Making Model ◽

Organizational Value

This chapter employs a cross-theory perspective by combining the four theories of agency theory, resource-dependent theory, resource-based theory, and knowledge- based theory, intending to explore the impact of inter-organizational strategic alliance on organizational value-based decision-making model and intellectual capital. Drawing the related variables upon making the literature review, analysis and inference, it infers 18 propositions and builds up a conceptual model. As a result, it is found that different formation factors of inter-organizational strategic alliance not only have significanty impact on an agency problem, but also have positive or negative impact on core resource and core knowledge strategic alliance. It is also found that when there is an inter-organizational agency problem, it will further increase the agency cost, and impact on the organizational value-based decision of inter-organizational strategic alliance in the future. Furthermore, the authors hope that researchers understanding through the governance mechanisms of inter-organizational core resource alliance and core knowledge strategic alliance are more matured, it will be more effective to prevent the appearance of agency problem and reduce agency cost and will be more helpful to the increase of organizational intellectual capital and the creation of organizational value.

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Discarding optimality: Throwing out the baby with the bathwater?

Behavioral and Brain Sciences ◽

10.1017/s0140525x18001401 ◽

2018 ◽

Vol 41 ◽

Cited By ~ 1

Author(s):

Patrick Simen ◽

Fuat Balcı

Keyword(s):

Decision Making ◽

Perceptual Decision Making ◽

Reward Rate ◽

Perceptual Decision ◽

Standard Observer ◽

Rate Maximization ◽

Reward Rate Maximization ◽

Descriptive Standard ◽

Observer Model

AbstractRahnev & Denison (R&D) argue against normative theories and in favor of a more descriptive “standard observer model” of perceptual decision making. We agree with the authors in many respects, but we argue that optimality (specifically, reward-rate maximization) has proved demonstrably useful as a hypothesis, contrary to the authors’ claims.

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LPCD framework: Analytical tool or psychological model?

Behavioral and Brain Sciences ◽

10.1017/s0140525x18001383 ◽

2018 ◽

Vol 41 ◽

Author(s):

David Danks

Keyword(s):

Decision Making ◽

Analytical Tool ◽

Mathematical Framework ◽

Bayesian Decision ◽

Perceptual Decision Making ◽

Psychological Model ◽

Psychological Reality ◽

Psychological Theories ◽

Target Article ◽

Bayesian Decision Making

AbstractThe target article uses a mathematical framework derived from Bayesian decision making to demonstrate suboptimal decision making but then attributes psychological reality to the framework components. Rahnev & Denison's (R&D) positive proposal thus risks ignoring plausible psychological theories that could implement complex perceptual decision making. We must be careful not to slide from success with an analytical tool to the reality of the tool components.

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Elaborating the role of reflection and individual differences in the study of folk-economic beliefs

Behavioral and Brain Sciences ◽

10.1017/s0140525x18000274 ◽

2018 ◽

Vol 41 ◽

Author(s):

Kevin Arceneaux

Keyword(s):

Decision Making ◽

Individual Differences ◽

Cognitive Processes ◽

Evolutionary History ◽

Behavioral Responses ◽

History Of ◽

Economic Beliefs

AbstractIntuitions guide decision-making, and looking to the evolutionary history of humans illuminates why some behavioral responses are more intuitive than others. Yet a place remains for cognitive processes to second-guess intuitive responses – that is, to be reflective – and individual differences abound in automatic, intuitive processing as well.

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