Price uncertainty and the optimal production-location decision

The integrated production-location decision involves the simultaneous choice of facility design (input mix) and plant location. This paper generalizes earlier work by incorporating price uncertainty and risk preferences into the problem. Properties of the optimal solution are characterized, and detailed comparative statics analyses are performed to identify the effects of price uncertainty, risk preferences, and production structure on the optimal solution. These results, which illuminate the economic mechanics and parametric sensitivity of such decisions, can be useful for developing and evaluating national and local public policies. An example of their potential use is given.     

On the two armed bandit with one probability known

Summary The dynamic programming approach to the solution of the two armed bandit problem with one probability known is discussed, for a general prior distribution for the unknown probability. Properties of the objective function and of the stopping boundaries are obtained. The problem of costly observations is discussed.     

The optimal disposition decision for product returns

We provide an analytic model for the optimal disposition decision for product returns. The manager decides which product returns to accept for processing at the remanufacturing facility, and which ones to sell immediately as-is at a salvage value. High congestion levels in the remanufacturing facility delay the sale of the remanufactured product at the secondary market, decreasing the value at which it can be sold; this may imply a more attractive salvaging option. This is particularly important for high-tech products with short life cycles, such as computers and printers. We propose a two-step policy. In the first step, the returned product’s random processing time is observed. In the second step, a disposition decision is made: if the processing time is larger than a threshold k* the product is salvaged; otherwise the product is remanufactured. We provide an approximate procedure to compute k* in industrial settings. Our numerical study demonstrates the superiority of our policy over the current industrial practice ignoring the time value of money.     

Cost-based decision rules for output,quality, and price

The present paper develops a theoretical model to address the relationship between a firm's pricing policy and its cost of increasing product quality. The model expresses both firm costs and firm revenues as functions of the quantity of a firm's output and overall product quality, where quality is expressed as quantity times quality per unit. The model starts with a generic good that measures output, and models quality as priced quality enhancement for each unit of the generic good. The model leads to decision rules by which the price of quality is a mark-up over the marginal cost of increasing product quality. The relationship between the price of quality and revenues from increasing output is also determined, and is conditioned by the sign and magnitude of the elasticity of demand for quality.     

WTO规则与我国经济法的发展

首先简要阐述了WTO规则与我国经济法的关系,接着论述了WTO规则对我国经济法的发展带来的契机与挑战,最后提出了应对挑战的对策。     

On stable rules for selecting committees

A voting rule is said to be stable if it always elects a fixed-size subset of candidates such that there is no outside candidate who is majority preferred to any candidate in this set whenever such a set exists. Such a set is called a Weak Condorcet Committee (WCC). Four stable rules have been proposed in the literature. In this paper, we propose two new stable rules. Since nothing is known about the properties of the stable rules, we evaluate all the identified stable rules on the basis of some appealing properties of voting rules. We show that they all satisfy the Pareto criterion and they are not monotonic. More, we show that every stable rule fails the reinforcement requirement.     

A survey and critique of multiobjective power plant siting decision rules

This paper reviews the use of multiobjective decision rules for solving power plant siting problems. After a discussion of exclusionary site screening methods for bounding the decision space, classes of multiobjective and goal programming desicion rules are discussedin the context of final site selection. Advances and limitations of these methods are highlighted. Although multiobjective decision rules have seen numerous applications to power plant siting in the literature, few electric utility companies have used these methods in practice. A review of the use of multiobjective methods in actual power plant siting decisions is also presented, and reasons for the paucity of real-world applications are suggested.     

Randomized decision rules in voting games: a model for strict proportional power

The concept of strict proportional power is introduced, as a means of formalizing a desire to avoid discrepancy between the seat distribution in a voting body and the actual voting power in that body, as measured by power indices in common use. Proportionality is obtained through use of a randomized decision rule (majority rule). Some technical problems which arise are discussed in terms of simplex geometry. Practical implications and problems in connection with randomized decision rules are indicated.     

On the fundamental thought behind voting rules

The theme is Arrow's requirement in his theorem of 1951 on methods for group choice, that the choice be independent of irrelevant alternatives. The attention is drawn to (1) his own explanation of this requirement in 1972, which is a quite different understanding than has been discussed in the voluminous literature on the theorem, (2) that Arrow, in fact, in 1985 showed an understanding for how irrelevant alternatives might in a meaningful way influence the group choice, (3) that admittedly the border-line between irrelevant and relevant alternatives in Arrow's original statement is arbitrary, and (4) that Arrow, if he had observed the final thought in the origin of the group theory by Borda, which he admittedly did not, might have realized that Borda's method stringently estimates the relevance of each alternative for the result.The author expresses his surprise that a theoretical conclusion based on an arbitrary fundament has been admired so long.     

An entry/exit decision for transnational production system: applying optimal financing behavior

This study introduces the real options approach to construct the decision model of entry (exit) in flexible transnational production systems. The firm value is appraised under the external financing behavior to solve the optimal cross-border financing ratios by transnational production systems. The proposed approach can evaluate effectively the potential investing value before project adopting, invested project value, potential disinvesting value, and salvage of abandon under matching the multinational enterprises financing behavior. How to decide the optimal cross-border financing ratios of the investing operation and disinvesting salvage timing is the point of the research in making of production system entry and exit.     

On the smoothness of optimal paths

Abstract The aim of this paper is to study the differentiability property of optimal paths in dynamic economic models. We address this problem from the point of view of the differential calculus in sequence spaces which are infinite-dimensional Banach spaces. We assume that the return or utility function is concave, and that optimal paths are interior and bounded. We study the C ^r differentiability of optimal paths vis-à-vis different parameters. These parameters are: the initial vector of capital stock, the discount rate and a parameter which lies in a Banach space (which could be the utility function itself). The method consists of applying an implicit function theorem on the Euler–Lagrange equation. In order to do this, we make use of classical conditions (i.e., the dominant diagonal block assumption) and we provide new ones. Mathematics Subject Classification (2000): 90A16, 49K40, 93C55 Journal of Economic Literature Classification: C161, D99, O41     

On optimal allocations for estimating the surface of a random field

In general, the construction of optimal designs is apparently a difficult task for the approximation of a random field indexed by more than one dimension. Besides the rate of convergence of the minimum achievable error hardly anything is known until now. However, if there is an immanent structure present in the random field, then, taking this structure into account, improved estimates can be obtained. For this situation we present adequate designs which show, at least, a nearly optimal performance. work supported by 313/ARC/VII/93/151 of the DAAD work supported by Ku719/2-1 of the DFG     

On the optimal mix of patent instruments

A special characteristic of the patent system is that it features multiple patent-policy levers that can be employed by policymakers. In this note, we develop an R&D-based growth model to analyze the optimal mix of patent instruments by considering patent breadth and the division of profit in research joint ventures. Our results are as follows. First, we analytically derive the optimal mix of patent breadth and the profit-division rule. Then, we calibrate the model to quantitatively evaluate the welfare gain from optimizing both patent instruments versus optimizing only patent breadth. We find that the welfare gain can be quantitatively significant.     

On the optimal taxation of common-pool resources

Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear differential games and apply this methodology to a common-pool resource model of a lake where pollution corresponds to benefits and at the same time affects the ecosystem services. This paper studies the structure of optimal state-dependent taxes that steer the combined economic-ecological system towards the trajectory of optimal management, and provides an algorithm for calculating such taxes.     

On choosing the optimal level of significance for the Durbin-Watson test and the Bayesian alternative

This paper critically evaluates the usual ad hoc selection of the level of significance in the Durbin-Watson test and compares this procedure to the Bayesian alternative. The results of Monte Carlo experiments indicate that an α-level substantially larger than that normally used may be appropriate. The Bayesian estimator performed better than all preliminary test estimates in terms of MSE.     

On the natural selection rule in general linear models

We consider a problem of selecting the best treatment in a general linear model. We look at the properties of the natural selection rule. It is shown that the natural selection rule is minimax under to “0–1” loss function and it is a Bayes rule under a monotone permutation invariant loss function with respect to a permutation invariant prior for every variance balanced design. Some other condition on the design matrix is given so that a Bayes rule with respect to a normal prior will be of simple structure.