scholarly journals Rationalizations and Mistakes: Optimal Policy with Normative Ambiguity

2018 ◽  
Vol 108 ◽  
pp. 98-102 ◽  
Author(s):  
Jacob Goldin ◽  
Daniel Reck
Keyword(s):  
Decision Maker ◽  
Health Plan ◽  
Optimal Policy ◽  
Utility Functions ◽  
Welfare Loss ◽  
Decision Makers ◽  
Social Programs ◽  
Default Options ◽  
Tax Salience ◽  
Plan Selection

Behavior that appears to violate neoclassical assumptions can often be rationalized by incorporating an optimization cost into decision-makers' utility functions. Depending on the setting, these costs may reflect either an actual welfare loss for the decision-maker who incurs them or a convenient (but welfare irrelevant) modeling device. We consider how the resolution of this normative ambiguity shapes optimal policy in a number of contexts, including default options, inertia in health plan selection, take-up of social programs, programs that encourage moving to a new neighborhood, and tax salience.

Bounded, Sigmoid Utility for Insurance Applications

2017 ◽  
Vol 11 (1) ◽  
Author(s):  
Siwei Gao ◽  
Michael R. Powers
Keyword(s):  
Decision Maker ◽  
Utility Functions ◽  
Decision Makers ◽  
Logical Necessity ◽  
Empirical Observation ◽  
Von Neumann ◽  
Bid Price ◽  
Bounded Below ◽  
Petersburg Paradox ◽  
Actual Decision

AbstractApplying a well-known argument of Karl Menger to an insurance version of the St. Petersburg Paradox (in which the decision maker is confronted with losses, rather than gains), one can assert that von Neumann-Morgenstern utility functions are necessarily concave upward and bounded below as decision-maker wealth tends to negative infinity. However, this argument is subject to two potential criticisms: (1) infinite-mean losses do not exist in the real world; and (2) the St. Petersburg Paradox derives its force from empirical observation (i. e., that actual decision makers would not agree to an arbitrarily large insurance bid price to transfer an infinite-mean loss), and thus does not impart logical necessity. In the present article, these two criticisms are addressed in turn. We first show that, although infinite-mean insurance losses technically do not exist, they do provide a reasonable model for certain large (i. e., excess and reinsurance) property-liability indemnities. We then employ the Two-Envelope Paradox to demonstrate the logical necessity of concave-upward, lower-bounded utility for arbitrarily small (i. e., negative) values of wealth. Finally, we note that recognizing the bounded, sigmoid nature of utility functions challenges certain fundamental understandings in the economics of insurance demand, and can lead to vastly different conclusions regarding the bid price for insurance.

Analytical Study on Big Data

2018 ◽  
Vol 8 (5) ◽  
pp. 75
Author(s):  
Vivek Raich ◽  
Pankaj Maurya
Keyword(s):  
Information Technology ◽  
Big Data ◽  
Decision Maker ◽  
Analytical Study ◽  
Large Data ◽  
Decision Makers ◽  
Continuous Increase ◽  
Analytic Methods ◽  
Data Store ◽  
Business Engineering

in the time of the Information Technology, the big data store is going on. Due to which, Huge amounts of data are available for decision makers, and this has resulted in the progress of information technology and its wide growth in many areas of business, engineering, medical, and scientific studies. Big data means that the size which is bigger in size, but there are several types, which are not easy to handle, technology is required to handle it. Due to continuous increase in the data in this way, it is important to study and manage these datasets by adjusting the requirements so that the necessary information can be obtained.The aim of this paper is to analyze some of the analytic methods and tools. Which can be applied to large data. In addition, the application of Big Data has been analyzed, using the Decision Maker working on big data and using enlightened information for different applications.

Women's Role Involvement in Family Businesses, Business Tensions, and Business Success

2003 ◽  
Vol 16 (1) ◽  
pp. 53-68 ◽  
Author(s):  
Sharon M. Danes ◽  
Patricia D. Olson
Keyword(s):  
Decision Maker ◽  
Family Business ◽  
Decision Makers ◽  
Business Success ◽  
Business Owner ◽  
Role Involvement ◽  
Work Involvement ◽  
Women's Role ◽  
The Impact ◽  
Major Decision

This paper is based on a study of 391 family-business-owning couples where the husband is the business owner. The purpose of the study was to examine the work involvement of the wife in the business, the business tensions, and the impact of those tensions on family business success. Fifty-seven percent of wives worked in the business, 47% of whom were paid. Forty-two percent of wives were considered major decision makers. Having more than one decision maker in the business impacted certain types of inclusion tension. Business and family success outcomes varied by level of tensions. There was initial evidence of a threshold where business tensions begin to affect business success negatively.

scholarly journals COST, CONTEXT, AND DECISIONS IN HEALTH ECONOMICS AND HEALTH TECHNOLOGY ASSESSMENT

2018 ◽  
Vol 34 (5) ◽  
pp. 434-441 ◽  
Author(s):  
Anthony J. Culyer
Keyword(s):  
Health Economics ◽  
Health Technology Assessment ◽  
Decision Maker ◽  
Technology Assessment ◽  
Health Technology ◽  
Decision Makers ◽  
Negative Consequences ◽  
Middle Income ◽  
Middle Income Countries ◽  
Context Dependent

Objectives:This study is an attempt to demystify and clarify the idea of cost in health economics and health technology assessment (HTA).Methods:Its method draws on standard concepts in economics. Cost is a more elusive concept than is commonly thought and can be particularly elusive in multidisciplinary territory like HTA.Results:The article explains that cost is more completely defined as opportunity cost, why cost is necessarily associated with a decision, and that it will always vary according to the context of that decision: whether choice is about inputs or outputs, what the alternatives are, the timing of the consequences of the decision, the nature of the commitment to which a decision maker is committed, who the decision maker is, and the constraints and discretion limiting or liberating the decision maker. Distinctions between short and long runs and between fixed and variable inputs are matters of choice, not technology, and are similarly context-dependent. Harms or negative consequences are, in general, not costs. Whether so-called “clinically unrelated” future costs and benefits should be counted in current decisions again depends on context.Conclusions:The costs of entire health programs are context-dependent, relating to planned rates of activity, volumes, and timings. The implications for the methods of HTA are different in the contexts of low- and middle-income countries compared with high-income countries, and further differ contextually according to the budget constraints (fixed or variable) facing decision makers.

scholarly journals Comparing interactive evolutionary multiobjective optimization methods with an artificial decision maker

2021 ◽  
Author(s):  
Bekir Afsar ◽  
Ana B. Ruiz ◽  
Kaisa Miettinen
Keyword(s):  
Multiobjective Optimization ◽  
Decision Maker ◽  
Optimization Problems ◽  
Optimization Methods ◽  
Decision Makers ◽  
Interactive Methods ◽  
Preference Information ◽  
Evolutionary Methods ◽  
Solution Processes ◽  
Trade Offs

AbstractSolving multiobjective optimization problems with interactive methods enables a decision maker with domain expertise to direct the search for the most preferred trade-offs with preference information and learn about the problem. There are different interactive methods, and it is important to compare them and find the best-suited one for solving the problem in question. Comparisons with real decision makers are expensive, and artificial decision makers (ADMs) have been proposed to simulate humans in basic testing before involving real decision makers. Existing ADMs only consider one type of preference information. In this paper, we propose ADM-II, which is tailored to assess several interactive evolutionary methods and is able to handle different types of preference information. We consider two phases of interactive solution processes, i.e., learning and decision phases separately, so that the proposed ADM-II generates preference information in different ways in each of them to reflect the nature of the phases. We demonstrate how ADM-II can be applied with different methods and problems. We also propose an indicator to assess and compare the performance of interactive evolutionary methods.

Information in Fleeting Opportunities

2013 ◽  
pp. 110-153
Author(s):  
Ibrahim Almojel ◽  
Jim Matheson ◽  
Pelin Canbolat
Keyword(s):  
Utility Function ◽  
Decision Maker ◽  
Optimal Policy ◽  
Value Of Information ◽  
Risk Preference ◽  
Dynamic Program ◽  
Exponential Utility ◽  
Venture Capitalists ◽  
Exponential Utility Function ◽  
Over Time

This paper focuses on the study of information in fleeting opportunities. An application example is the evaluation of business proposals by venture capitalists. The authors formulate the generic problem as a dynamic program where the decision maker can either accept a given deal directly, reject it directly, or seek further information on its potential and then decide whether to accept it or not. Results show well behaved characteristics of the optimal policy, deal flow value, and the value of information over time and capacity. It is presumed that the risk preference of the decision maker follows a linear or an exponential utility function. This approach is illustrated through several examples.

Material Selection Using a Novel Multiple Attribute Decision Making Method

2012 ◽  
pp. 252-266
Author(s):  
R. V. Rao ◽  
B. K. Patel
Keyword(s):  
Decision Making ◽  
Fuzzy Logic ◽  
Decision Maker ◽  
Design Process ◽  
Material Selection ◽  
Multiple Attribute Decision Making ◽  
Decision Makers ◽  
Selection Problem ◽  
Multiple Attribute ◽  
Selection Of

Selection of a most appropriate material is a very important task in design process of every product. There is a need for simple, systematic, and logical methods or mathematical tools to guide decision makers in considering a number of selection attributes and their interrelations and in making right decisions. This paper proposes a novel multiple attribute decision making (MADM) method for solving the material selection problem. The method considers the objective weights of importance of the attributes as well as the subjective preferences of the decision maker to decide the integrated weights of importance of the attributes. Furthermore, the method uses fuzzy logic to convert the qualitative attributes into the quantitative attributes. Two examples are presented to illustrate the potential of the proposed method.

An Outsourcing Acceptance Model

2010 ◽  
pp. 534-557
Author(s):  
John Benamati ◽  
T.M. Rajkumar
Keyword(s):  
Project Management ◽  
Technology Acceptance ◽  
Decision Maker ◽  
External Environment ◽  
Ease Of Use ◽  
Perceived Usefulness ◽  
Decision Makers ◽  
Application Development ◽  
External Variables ◽  
Acceptance Model

The use of outsourcing is expanding rapidly. This chapter empirically tests a model of application development outsourcing acceptance based on the technology acceptance model (TAM). TAM-suggested perceived usefulness and ease of use mediate the effects of other variables on users’ attitudes towards a technology. The model tested in this chapter suggests that perceived usefulness and ease of use of outsourcing mediate the effects of the external environment, prior outsourcing relationships, and risks on decision-makers’ attitude toward application development outsourcing. One hundred and sixty respondents to a survey sent to 3000 IT decision makers provided data to confirm the applicability of TAM and the influences of these external variables. Support for applying TAM in this alternative context was found. Three sub-dimensions of risk, project management, relationship, and employee risk emerged. Project management and employee risks along with prior relationships were found to significantly influence decision maker perceptions about application development outsourcing.

Institutional Structures

2021 ◽  
pp. 32-64
Author(s):  
Paul Daly
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Judicial Review ◽  
Decision Makers ◽  
Administrative Action ◽  
Institutional Structures ◽  
General Aspects ◽  
Individual Self ◽  
Personal Interests ◽  
Or History

This chapter is concerned with the structure of administrative decision-making institutions. Two general aspects of this important topic are particularly relevant to the law of judicial review of administrative action. First, the no-bias principle ensures that decision-making is impartial, by preventing decision-makers from acting where their personal interests, conduct or history could conceivably raise a concern about their ability to make a dispassionate decision on the merits. Second, the principle that a decision-maker must retain their discretion prevents decision-makers from delegating their powers (subject to an exception in the case of government ministers) and limits the scope for the development of policies about how discretionary powers will be exercised in the future. These principles can be understood as being structured by the values of individual self-realisation, good administration, electoral legitimacy and decisional autonomy.

Two-Decision-Maker Conflict Resolution with Fuzzy Preferences

2014 ◽  
Vol 2 (2) ◽  
pp. 40-59
Author(s):  
Mubarak S. Al-Mutairi
Keyword(s):  
Fuzzy Logic ◽  
Conflict Resolution ◽  
Decision Maker ◽  
Decision Makers ◽  
Fuzzy Approach ◽  
Model Uncertainties ◽  
Preference Information ◽  
Fuzzy Preferences ◽  
Illustrative Application ◽  
Fuzzy Preference

A unique fuzzy approach is developed to model uncertainties in the preferences of a decision maker involved in a conflict. Human judgments, including expressing preferences over a set of feasible outcomes or states in a conflict, are usually imprecise. Situations characterized by vagueness, impreciseness, incompleteness and ambiguity, are often reflected in the decision maker's preferences. When modeling a conflict, it is assumed that the decision makers, the courses of actions available for each, and the preferences of each decision maker are known. When the preferences of the decision maker over a certain set of actions are not known with certainty, this could affect the overall equilibria which are predicted in an analysis. Hence, fuzzy logic is used to handle imprecise or vague preference information so that realistic equilibria can be found. The well-known game of Prisoner's Dilemma, in which one must decide whether or not to cooperate, is employed as an illustrative application to demonstrate how the fuzzy preference methodology works in practice.

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