scholarly journals Microfoundations of Discounting

2021 ◽  
Author(s):  
Alexander Adamou ◽  
Yonatan Berman ◽  
Diomides Mavroyiannis ◽  
Ole Peters
Keyword(s):  
Growth Rate ◽  
Decision Maker ◽  
Exponential Function ◽  
Hyperbolic Discounting ◽  
Decision Makers ◽  
Preference Reversal ◽  
Normative Model ◽  
Behavioral Bias ◽  
Exponential Discounting ◽  
Descriptive Models

An important question in economics is how people choose between different payments in the future. The classical normative model predicts that a decision maker discounts a later payment relative to an earlier one by an exponential function of the time between them. Descriptive models use nonexponential functions to fit observed behavioral phenomena, such as preference reversal. Here we propose a model of discounting, consistent with standard axioms of choice, in which decision makers maximize the growth rate of their wealth. Four specifications of the model produce four forms of discounting—no discounting, exponential discounting, hyperbolic discounting, and a hybrid of exponential and hyperbolic discounting—two of which predict preference reversal. Our model requires no assumption of behavioral bias or payment risk.

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.

People versus Policies: Decision-makers have divergent preferences for decisions about individuals and equivalent policies that affect individuals

2020 ◽  
Author(s):  
David Mauricio Munguia Gomez ◽  
Emma Levine
Keyword(s):  
Real World ◽  
College Admissions ◽  
Decision Makers ◽  
Preference Reversal ◽  
Lay People ◽  
Admissions Officers ◽  
New Type ◽  
Selection Policies

Across nine main studies (N = 7,024) and nine supplemental studies (N = 3,279), we find that people make systematically different choices when choosing between individuals and choosing between equivalent policies that affect individuals. In college admissions and workplace hiring contexts, we randomly assigned participants to select one of two individuals or choose one of two selection policies. People were significantly more likely to choose a policy that would favor a disadvantaged candidate over a candidate with objectively higher achievements than they were to favor a specific disadvantaged candidate over a specific candidate with objectively higher achievements. We document these divergent choices among admissions officers, working professionals, and lay people, using both within-subject and between-subject designs, and across a range of stimuli and decision contexts. We find evidence that these choices diverge because thinking about policies causes people to rely more on their values and less on the objective attributes of the options presented, which overall, leads more people to favor disadvantaged candidates in selection contexts. This research documents a new type of preference reversal in important, real-world decision contexts, and has practical and theoretical implications for understanding why our choices so frequently violate our espoused policies.

Transitioning to a higher retirement age with exponential and quasi-hyperbolic discounters in mixed economies

2020 ◽  
Author(s):  
Sarah Lynne Salvador Daway-Ducanes
Keyword(s):  
Overlapping Generations ◽  
Hyperbolic Discounting ◽  
Welfare Effects ◽  
Retirement Age ◽  
Tax Rate ◽  
Welfare Impacts ◽  
The Social ◽  
Welfare Implications ◽  
Pension Benefits ◽  
Exponential Discounting

Abstract This paper analyses the macroeconomic and welfare effects of a higher retirement age within a dynamic overlapping generations framework, wherein exponential discounting and sophisticated quasi-hyperbolic discounting agents coexist in ‘mixed economies’. The transitional dynamics of economic aggregates depend on the proportion of QHD agents, and the extent to which reducing the social security tax rate mitigates crowding-out effects on savings and enables both lower pension contributions and higher pension benefits. Welfare impacts across agent types and cohorts differ accordingly: QHD agents employ the higher retirement age as a commitment mechanism to mitigate the adverse welfare implications of present-biasedness.

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 Resolving Time Inconsistency of Decision Problem with Non-expectation Operator: From Internal Conflict to Internal Harmony by Strategy of Self-Coordination

2020 ◽  
Author(s):  
Xiangyu Cui ◽  
Duan Li ◽  
Yun Shi
Keyword(s):  
Decision Maker ◽  
Decision Problem ◽  
Hyperbolic Discounting ◽  
Time Inconsistency ◽  
Internal Conflict ◽  
Equilibrium Strategy ◽  
Game Model ◽  
Long Run ◽  
Short Run ◽  
Time Inconsistent

When a stochastic decision problem is time inconsistent, the decision maker would be puzzled by his conflicting decisions optimally derived from his time-varying preferences at different time instants (with different time horizons). While the long-run self (LR) of the decision maker pursues the long-term optimality, the short-run selves (SRs) of the decision maker at different time instants bow to short-term temptations. While the literature began to recognize the importance to strike a balance between LR's and SRs' interests, the existing results are not applicable to situations where the decision maker's preferences involve non-expectation operators. We propose an operable unified two-tier dual-self game model with commitment by punishment, which can cope with general time inconsistent stochastic decision problems with both expectation and non-expectation operators in the objective function. By attaching punishment terms to both the preferences of LR and SRs which quantitatively evaluate the internal conflict among different selves, our game model aligns the interests of the LR and SRs to a certain degree. The equilibrium strategy, termed strategy of self-coordination, achieves some degree of internal harmony among various selves. We successfully apply the model to the investment and consumption problem with quasi-hyperbolic discounting and the dynamic mean-variance portfolio selection problem.

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.

Economics of Immediate Gratification in Mobile Commerce

2011 ◽  
pp. 206-226
Author(s):  
Kerem Tomak
Keyword(s):  
Behavioral Economics ◽  
Network Externalities ◽  
Hyperbolic Discounting ◽  
Mobile Commerce ◽  
Low Levels ◽  
Profit Maximizing ◽  
The Impact ◽  
Second Period ◽  
Exponential Discounting

In this chapter we attempt to build a bridge between mobile commerce and the emerging field of behavioral economics. We first provide examples from mobile commerce and link them to behavioral economics. We then build a stylized model to assess the impact of hyperbolic discounting on the profit-maximizing behavior of a monopolist firm. We find that the monopolist makes lower profits compared to exponential discounting consumers for low levels of (positive) network externalities. As the network externalities increase, first-period prices increase, second period prices decrease and the profits increase in equilibrium.

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.

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