scholarly journals Imitation Perfection—A Simple Rule to Prevent Discrimination in Procurement

2020 ◽  
Vol 12 (3) ◽  
pp. 189-245
Author(s):  
Helene Mass ◽  
Nicolas Fugger ◽  
Vitali Gretschko ◽  
Achim Wambach
Keyword(s):  
Expected Utility ◽  
Equal Treatment ◽  
Simple Rule ◽  
Trade Off ◽  
Optimal Auctions ◽  
Social Surplus

Procurement regulation aimed at curbing discrimination requires equal treatment of sellers. However, Deb and Pai (2017) show that such regulation imposes virtually no restrictions on the ability to discriminate. We propose a simple rule—imitation perfection—that restricts discrimination significantly. It ensures that in every equilibrium, bidders with the same valuation distribution and the same valuation earn the same expected utility. If all bidders are homogeneous, revenue and social surplus optimal auctions consistent with imitation perfection exist. For heterogeneous bidders, however, it is incompatible with revenue and social surplus optimization. Thus, a trade-off between non-discrimination and optimality exists. (JEL D44, D82, H57)

The incentive and efficiency effects of affirmative action: does envy matter?

2019 ◽  
Vol 71 (4) ◽  
pp. 930-951
Author(s):  
Rezina Sultana
Keyword(s):  
Affirmative Action ◽  
Expected Utility ◽  
Equal Opportunity ◽  
Employment Opportunities ◽  
Trade Off ◽  
Disadvantaged Groups ◽  
Group I ◽  
Ex Ante ◽  
Unequal Access ◽  
Efficiency Effects

Abstract This paper introduces envy into the study of affirmative action (AA) policies. Envy is defined as occurring when people have the same income with different abilities or with equal abilities have different incomes because of unequal access to employment opportunities—which occurs both under adverse and compensatory-discrimination. I analyse how envy, when there is discrimination, interacts with incentive for individuals to make productivity-enhancing investment and thereby affects economic efficiency. A policymaker maximizes the expected utility of the population taking into account the trade-off between fairness or equity (no-envy) and efficiency. An exclusive equal opportunity policy (EOP) that forestalls envy would allocate skilled jobs in a manner skewed towards the historically advantaged group. I study the conditions under which AA is fairness-improving in access to ‘good’ jobs and the implications for efficiency in job allocation between ex ante advantaged and disadvantaged groups.

scholarly journals Non-human primates satisfy utility maximization in compliance with the continuity axiom of Expected Utility Theory

2020 ◽  
Author(s):  
Simone Ferrari-Toniolo ◽  
Philipe M. Bujold ◽  
Fabian Grabenhorst ◽  
Raymundo Báez-Mendoza ◽  
Wolfram Schultz
Keyword(s):  
Expected Utility ◽  
Utility Theory ◽  
Utility Maximization ◽  
Expected Utility Theory ◽  
Decision Makers ◽  
Utility Measure ◽  
Trade Off ◽  
Subjective Value ◽  
Subjective Utility ◽  
Continuity Axiom

ABSTRACTExpected Utility Theory (EUT), the first axiomatic theory of risky choice, describes choices as a utility maximization process: decision makers assign a subjective value (utility) to each choice option and choose the one with the highest utility. The continuity axiom, central to EUT and its modifications, is a necessary and sufficient condition for the definition of numerical utilities. The axiom requires decision makers to be indifferent between a gamble and a specific probabilistic combination of a more preferred and a less preferred gamble. While previous studies demonstrated that monkeys choose according to combinations of objective reward magnitude and probability, a concept-driven experimental approach for assessing the axiomatically defined conditions for maximizing subjective utility by animals is missing. We experimentally tested the continuity axiom for a broad class of gamble types in four male rhesus macaque monkeys, showing that their choice behavior complied with the existence of a numerical utility measure as defined by the economic theory. We used the numerical quantity specified in the continuity axiom to characterize subjective preferences in a magnitude-probability space. This mapping highlighted a trade-off relation between reward magnitudes and probabilities, compatible with the existence of a utility function underlying subjective value computation. These results support the existence of a numerical utility function able to describe choices, allowing for the investigation of the neuronal substrates responsible for coding such rigorously defined quantity.SIGNIFICANCE STATEMENTA common assumption of several economic choice theories is that decisions result from the comparison of subjectively assigned values (utilities). This study demonstrated the compliance of monkey behavior with the continuity axiom of Expected Utility Theory, implying a subjective magnitude-probability trade-off relation which supports the existence of numerical subjective utility directly linked to the theoretical economic framework. We determined a numerical utility measure able to describe choices, which can serve as a correlate for the neuronal activity in the quest for brain structures and mechanisms guiding decisions.

Economic Properties of the Risk Sensitive Criterion for Portfolio Management

2003 ◽  
Vol 2 (2) ◽  
pp. 3-17 ◽  
Author(s):  
Tomasz R. Bielecki ◽  
Stanley R. Pliska
Keyword(s):  
Growth Rate ◽  
Control Theory ◽  
Stochastic Control ◽  
Expected Utility ◽  
Portfolio Management ◽  
Theoretical Studies ◽  
Control Methods ◽  
Trade Off ◽  
Average Return ◽  
Risk Sensitive

The idea of using stochastic control methods for theoretical studies of portfolio management has long been standard, with maximum expected utility criteria commonly being used. But in recent years a new kind of criterion, the risk sensitive criterion, has emerged from the control theory literature and been applied to portfolio management. This paper studies various economic properties of this criterion for portfolio management, thereby providing justification for its theoretical and practical use. In particular, it is shown that the risk sensitive criterion amounts to maximizing a portfolio's risk adjusted growth rate. In other words, it is essentially the same as what is commonly done in practice: find the best trade‐off between a portfolio's average return and its average volatility.

The Ranking Properties of Healthy-Years Equivalents and Quality-Adjusted Life-Years Under Certainty and Uncertainty

1995 ◽  
Vol 11 (1) ◽  
pp. 40-48 ◽  
Author(s):  
Magnus Johannesson
Keyword(s):  
Expected Utility ◽  
The Other ◽  
Quality Adjusted Life Years ◽  
Health States ◽  
Trade Off ◽  
Individual Preferences ◽  
Life Years ◽  
Ex Ante ◽  
Quality Adjusted Life ◽  
Health Profiles

AbstractThis paper investigates the theoretical properties of healthy-years equivalents (HYEs) and quality-adjusted life-years (QALYs). A distinction is made between ex ante HYEs (EA-HYEs) and expected HYEs (EXP-HYEs) and between risk-neutral quality-adjusted life-years (RN-QALYs) and risk-adjusted quality adjusted life-years (RA-QALYs). In the case of certainty, HYEs always rank health profiles according to individual preferences, whereas QALYs only rank health profiles according to individual preferences if constant proportional trade-off holds for all health states and if additive independence of quality in different periods holds. In the case of uncertainty, EA-HYEs always rank risky health profiles the same way as expected utility. The assumptions needed for the other measures to rank risky health profiles the same way as expected utility are: risk neutrality with respect to healthy time for EXP-HYEs; risk neutrality with respect to time in all health states and additive independence of quality in different periods for RN-HYEs; and constant proportional risk posture with respect to time in all health states and additive independence of quality in different periods for RA-QALYs.

scholarly journals Discounted and Expected Utility from the Probability and Time Trade-Off Model

Mathematics ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 601 ◽  
Author(s):  
Salvador Cruz Rambaud ◽  
Ana María Sánchez Pérez
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Theoretical Principle ◽  
Utility Model ◽  
Trade Off ◽  
Ptt Model ◽  
Discounted Utility ◽  
Decision Making Processes ◽  
Expected Utility Model ◽  
The Eu

This paper shows the interaction between probabilistic and delayed rewards. In decision- making processes, the Expected Utility (EU) model has been employed to assess risky choices whereas the Discounted Utility (DU) model has been applied to intertemporal choices. Despite both models being different, they are based on the same theoretical principle: the rewards are assessed by taking into account the sum of their utilities and some similar anomalies have been revealed in both models. The aim of this paper is to characterize and consider particular cases of the Time Trade-Off (PPT) model and show that they correspond to the EU and DU models. Additionally, we will try to build a PTT model starting from a discounted and an expected utility model able to overcome the limitations pointed out by Baucells and Heukamp.

scholarly journals Continuity and catastrophic risk

2021 ◽  
pp. 1-9
Author(s):  
H. Orri Stefánsson
Keyword(s):  
Social Welfare ◽  
Decision Maker ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Continuity Condition ◽  
Trade Off ◽  
Catastrophic Risk ◽  
Lifetime Income ◽  
Continuity Axiom

Abstract Suppose that a decision-maker’s aim, under certainty, is to maximize some continuous value, such as lifetime income or continuous social welfare. Can such a decision-maker rationally satisfy what has been called ‘continuity for easy cases’ while at the same time satisfying what seems to be a widespread intuition against the full-blown continuity axiom of expected utility theory? In this note I argue that the answer is ‘no’: given transitivity and a weak trade-off principle, continuity for easy cases violates the anti-continuity intuition. I end the note by exploring an even weaker continuity condition that is consistent with the aforementioned intuition.

Simple Rule Predicts C. difficile Recurrence

2009 ◽  
Vol 42 (7) ◽  
pp. 28
Author(s):  
ROBERT FINN
Keyword(s):  
Simple Rule

A Flow-Preserving Algorithm for the Time-Cost Trade-Off Problem

1982 ◽  
Vol 14 (2) ◽  
pp. 109-113 ◽  
Author(s):  
Suleyman Tufekci
Keyword(s):  
Time Cost ◽  
Trade Off

Dual Goals for Speed and Accuracy on the Same Performance Task

2012 ◽  
Vol 11 (3) ◽  
pp. 118-126 ◽  
Author(s):  
Olive Emil Wetter ◽  
Jürgen Wegge ◽  
Klaus Jonas ◽  
Klaus-Helmut Schmidt
Keyword(s):  
Memory Scanning ◽  
Performance Task ◽  
Performance Tasks ◽  
Trade Off ◽  
Test Experiment ◽  
Trade Offs ◽  
New Finding ◽  
Sternberg Paradigm ◽  
Speed Accuracy ◽  
Speed And Accuracy

In most work contexts, several performance goals coexist, and conflicts between them and trade-offs can occur. Our paper is the first to contrast a dual goal for speed and accuracy with a single goal for speed on the same task. The Sternberg paradigm (Experiment 1, n = 57) and the d2 test (Experiment 2, n = 19) were used as performance tasks. Speed measures and errors revealed in both experiments that dual as well as single goals increase performance by enhancing memory scanning. However, the single speed goal triggered a speed-accuracy trade-off, favoring speed over accuracy, whereas this was not the case with the dual goal. In difficult trials, dual goals slowed down scanning processes again so that errors could be prevented. This new finding is particularly relevant for security domains, where both aspects have to be managed simultaneously.

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