Preface 1. Decision-Theoretic Foundations 1.1 Game Theory, Rationality, and Intelligence 1.2 Basic Concepts of Decision Theory 1.3 Axioms 1.4 The Expected-Utility Maximization Theorem 1.5 Equivalent Representations 1.6 Bayesian Conditional-Probability Systems 1.7 Limitations of the Bayesian Model 1.8 Domination 1.9 Proofs of the Domination Theorems Exercises 2. Basic Models 2.1 Games in Extensive Form 2.2 Strategic Form and the Normal Representation 2.3 Equivalence of Strategic-Form Games 2.4 Reduced Normal Representations 2.5 Elimination of Dominated Strategies 2.6 Multiagent Representations 2.7 Common Knowledge 2.8 Bayesian Games 2.9 Modeling Games with Incomplete Information Exercises 3. Equilibria of Strategic-Form Games 3.1 Domination and Ratonalizability 3.2 Nash Equilibrium 3.3 Computing Nash Equilibria 3.4 Significance of Nash Equilibria 3.5 The Focal-Point Effect 3.6 The Decision-Analytic Approach to Games 3.7 Evolution. Resistance. and Risk Dominance 3.8 Two-Person Zero-Sum Games 3.9 Bayesian Equilibria 3.10 Purification of Randomized Strategies in Equilibria 3.11 Auctions 3.12 Proof of Existence of Equilibrium 3.13 Infinite Strategy Sets Exercises 4. Sequential Equilibria of Extensive-Form Games 4.1 Mixed Strategies and Behavioral Strategies 4.2 Equilibria in Behavioral Strategies 4.3 Sequential Rationality at Information States with Positive Probability 4.4 Consistent Beliefs and Sequential Rationality at All Information States 4.5 Computing Sequential Equilibria 4.6 Subgame-Perfect Equilibria 4.7 Games with Perfect Information 4.8 Adding Chance Events with Small Probability 4.9 Forward Induction 4.10 Voting and Binary Agendas 4.11 Technical Proofs Exercises 5. Refinements of Equilibrium in Strategic Form 5.1 Introduction 5.2 Perfect Equilibria 5.3 Existence of Perfect and Sequential Equilibria 5.4 Proper Equilibria 5.5 Persistent Equilibria 5.6 Stable Sets 01 Equilibria 5.7 Generic Properties 5.8 Conclusions Exercises 6. Games with Communication 6.1 Contracts and Correlated Strategies 6.2 Correlated Equilibria 6.3 Bayesian Games with Communication 6.4 Bayesian Collective-Choice Problems and Bayesian Bargaining Problems 6.5 Trading Problems with Linear Utility 6.6 General Participation Constraints for Bayesian Games with Contracts 6.7 Sender-Receiver Games 6.8 Acceptable and Predominant Correlated Equilibria 6.9 Communication in Extensive-Form and Multistage Games Exercises Bibliographic Note 7. Repeated Games 7.1 The Repeated Prisoners Dilemma 7.2 A General Model of Repeated Garnet 7.3 Stationary Equilibria of Repeated Games with Complete State Information and Discounting 7.4 Repeated Games with Standard Information: Examples 7.5 General Feasibility Theorems for Standard Repeated Games 7.6 Finitely Repeated Games and the Role of Initial Doubt 7.7 Imperfect Observability of Moves 7.8 Repeated Wines in Large Decentralized Groups 7.9 Repeated Games with Incomplete Information 7.10 Continuous Time 7.11 Evolutionary Simulation of Repeated Games Exercises 8. Bargaining and Cooperation in Two-Person Games 8.1 Noncooperative Foundations of Cooperative Game Theory 8.2 Two-Person Bargaining Problems and the Nash Bargaining Solution 8.3 Interpersonal Comparisons of Weighted Utility 8.4 Transferable Utility 8.5 Rational Threats 8.6 Other Bargaining Solutions 8.7 An Alternating-Offer Bargaining Game 8.8 An Alternating-Offer Game with Incomplete Information 8.9 A Discrete Alternating-Offer Game 8.10 Renegotiation Exercises 9. Coalitions in Cooperative Games 9.1 Introduction to Coalitional Analysis 9.2 Characteristic Functions with Transferable Utility 9.3 The Core 9.4 The Shapkey Value 9.5 Values with Cooperation Structures 9.6 Other Solution Concepts 9.7 Colational Games with Nontransferable Utility 9.8 Cores without Transferable Utility 9.9 Values without Transferable Utility Exercises Bibliographic Note 10. Cooperation under Uncertainty 10.1 Introduction 10.2 Concepts of Efficiency 10.3 An Example 10.4 Ex Post Inefficiency and Subsequent Oilers 10.5 Computing Incentive-Efficient Mechanisms 10.6 Inscrutability and Durability 10.7 Mechanism Selection by an Informed Principal 10.8 Neutral Bargaining Solutions 10.9 Dynamic Matching Processes with Incomplete Information Exercises Bibliography Index

博弈论 : 矛盾冲突分析 = Game theory : analysis of conflict

House of Quality

Games and Decisions. By R. Duncan Luce and Howard Raiffa. Pp. xi, 509. 70s. 1957. (J Wiley & Sons)

Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions

All new ideas and possible variants of decisions mustbe compared according to many criteria. The complexnature of decision-making requires practitioners to selectinvestment options based on a wider variety of policyconsiderations in addition to cost benefit analysis and puretechnical considerations. In economics and decisionmaking it is essential to be able to take into account theimpacts of cultural, social, moral, legislative, demographic,economic, environmental, governmental and technologicalchange, as well as changes in the business world oninternational, national, regional and local markets. Costbenefit analysis approach is a useful tool for investmentdecision-making from an economic perspective. Cautionsshould also be given to the methods of determining thevalue of social and local interests. Some socialexternalities, such as employment and regional economicimpacts, are generally omitted in current practices.Current practices tend to use cardinal or ordinal scales inmeasure in non-monetized criteria. The use of unreasonablemonetization methods in some cases has discredited costbenefit analysis in the eyes of decision makers and thepublic. It may be appropriate to consider these externalities inqualitative forms in a multi-criteria analysis. Multi-criteriadecision making is used in various areas of humanactivities. The Criteria can be qualitative and quantitative.They usually have different units of measurement anddiffer in optimization direction. The normalization aims atobtaining comparable scales of criteria values. In the newversion of the program LEVI 4 the normalization methodsare including vector, linear scale, non-linear and newlogarithmic techniques may be used. This softwareconsiders the main aspects of two-sided game problems.The following strategic principles are used: Wald's rule,Savage criterion, Hurwicz's rule, Laplace's rule, Bayes'srule and Hodges-Lehmann rule. This program isdemonstrated by considering a real case study involving 4evaluation criteria of the currently used external walls ofindividual residential buildings.

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Multi-criteria Optimization System for Decision Making in Construction Design and Management

Small to medium sized business enterprises are young and constantly changing their sphere of activities depending on fluctuations of the market. The enterprises daily use accounting information, which is used in enterprise’s financial situation evaluation, correct decisions making, enterprise’s financial situation analysis according to the results received, making plans for future and controlling the whole enterprise. Accounting information systems play a significant role in providing the financial information for decision making within an organization. The systems are simultaneously providing information for a variety of other decision makers in production, human resources, finance, management, marketing, and supply chain logistics. Unfortunately, accounting systems often do not support business properly. The causes may be: systems mostly are too large and complex to comprehend them in entirety and traditional information technologies are not efficient. There is a need to adopt the newest technologies in small to medium sized business. In the paper investigated study showed the newest trends in accounting information systems for small to medium sized business. One of the newest trends in the information technologies world is cloud computing based technology. Accounting transfer to "cloud" is a new and innovative solution that can help save significant funds small and medium-sized enterprises. Small to medium businesses can get a lot of advantages with the newest technology. However, it has its own risks too. The paper indicates advantages and dangers of the newest technology within the business. Investigation of accounting systems for small and medium sized enterprises in Lithuania in the cloud-computing context is a part of the research. Lithuanian companies have a great opportunity to use cloud computing capabilities. But only one developer of accounting systems offered the cloud based accounting program. Results of the research summarized only by main accounting software. Investigation was carried out by using systematic and comparable literature review of accounting information systems faced to small to medium sized business. The investigation also shows that there are not so many scientific papers on the newest cloud computing trends in Lithuania. Accordingly, this research was mostly based on literature review sourced from the internet. DOI: http://dx.doi.org/10.5755/j01.ee.23.1.1220

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Cloud–Computing Based Accounting for Small to Medium Sized Business

In scientific literature value is referred to as the most complete and exact indicator of business condition that reflects changes in internal and external environment of an enterprise. In a dynamic environment where risk and uncertainty are inevitable attributes of the process of the enterprise’s business forecast, due to the change of various drivers, business value may fluctuate in a rather wide range. On one hand, risk and uncertainty prompt to think in terms of future scenarios and to anticipate the full range of value dimensions. On the other hand, the fluctuation of business value within a wide range predetermines the problematic aspect of rendering the final conclusion on business value. Since business value changes with the change of influencing drivers, the analysis of drivers that have impact on business value becomes urgent. Based on such an analysis it would be possible to calculate the most probable dimension of business value. In scientific literature focusing on the issues of business valuation the aspect of the analysis of business value drivers is discussed very fragmentally. Though researchers emphasise the importance of determining the impact of value drivers that influence the dimension of business value, there is no unified approach to the classification and investigation of these value drivers. The linear classifications of influencing business value drivers presented in the works of authors who explore the issues of business valuation are inconsistent and insufficient for the evaluation of business value drivers. Given a linear presentation of drivers it is difficult to see the interrelations of the influencing business value drivers and business value or to measure quantitatively the impact of change of business value drivers on business value. Having proved the limitation of linear classifications of influencing business value drivers, a classification of business value drivers was formed by grouping the drivers that have impact on business value in levels one to five. This classification is based on the decomposition of business value established by the method of discounted cash flows. Such a graded presentation of drivers enables to have an insight to the inter-relations of business value drivers and business value and to evaluate the impact of each driver change not only on the change of the business value but also on the change of a higher level driver. The analysis of scientific literature shows that references to the application of methods in establishing the impact of drivers on business value are very limited. It is not enough to lean upon the results of the sensitivity analysis, which is presented in scientific literature as the most widely used in determining the impact of drivers on business value, because it only enables to evaluate the impact of one driver change (increase/decrease) on business value, leaving aside possible change of other drivers. Since in a factual situation the change is usually present in more than one driver, there occurs a need to apply those methods of factorial analysis which would enable a complex evaluation of the impact of change of many drivers on the change of business value. By discovering the limitation of references to the methods that may be used for value drivers investigation as well as the complexity of these methods’ selection and application, the authors of this article propose for the establishment of the impact of business value drivers on business value to adapt the integral method of economic factorial analysis, which allowed to wholly evaluate the impact of different level drivers on business value. Theoretical and empirical researches resulted in the creation of a business valuation model based on the analysis of business value drivers, which incorporates the classification of business value drivers and the establishment of their impact on value into the process of business valuation, and enables to provide the final result of business valuation – a dimension of business value.

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Business Valuation Model Based on the Analysis of Business Value Drivers

This article is to investigate relevant and sophisti-cated problem concerned with risk reflection in business valuation methodology. The relevance and sophistication of risk reflection in business valuation methodology is affirmed by the discus-sions of scientists who analyse the problems of business valuation. Description, classification and valuation of risk within context of business valuation have several approaches in scientific literature. Presented classifica-tions of risk are various and include various types of risk and factors determining risk. Considering variety of risk classifications it is sug-gested risk’s classification based on decomposition of systematic (external) and unsystematic (internal) risks to the factors that have influence these kinds of risks. Factors of systematic risk are classified according to factors of macro environment and industry environment. Factors of unsystematic risk are divided into two groups: quantitative and qualitative factors. Classifica-tion based on approach of risk decomposition allows determining the factors of risk of various levels and also shows the connection between these factors and both systematic and unsystematic risks. The analysis of scientific literature shows that there is more than one approach to risk reflection in the busi-ness valuation methodology. Two alternative ways of risk reflection within the calculations of business value are mentioned in the works of different authors who re-search the problems of business valuation. The first one is related to risk’s reflection in the calculations of cash flow and the second one allows risk valuation in the discount rate. Although various definitions of discount rate are given in scientific literature most authors de-scribe it as rate of return used to transfer free cash flow into current value. Discount rate is the company’s fi-nancing source price which reflects time factor and risk in the calculation. According to this risk should be re-flected in discount rate calculations within context of business valuation. Risk valuation in the calculations of discount rate is based on discount rate decomposition to different level factors having influence on discount rate. First level factors are cost of equity and cost of debt; second level factors are debt rate of return and equity rate of return; third level factors are interest rate, profits tax, equity rate of return; fourth level factors are risk-free rate, risk premium for factors of macro environment, industry environment and internal environment. It is necessary to evaluate narrowness of risk- return models appliance in practice of business valuation in Lithuania while deter-mining factors of one of discount rate elements – equity rate of return. According to this narrowness it is sug-gested to calculate cost of equity by summing up securi-ties risk-free rate with expert’s determined premium for risk for factors of macro environment, industry envi-ronment and internal environment Scheme of discount rate factorial analysis within context of business valuation created by the authors of this article allows envisaging relation between discount rate and these factors, also research influence of these factors on discount rate and business value.

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Risk Reflection in Business Valuation Methodology

Decision making is a creative and knowledge de-manding process which is being analyzed in scientific publications and continually improved in practice. The Authors of this article have sought to systematize results of behavior of both motivation factors of decision making person (DMP) and environment factor found in various publications and also to present their own approach to perception of information meaning within diverse time intervals. Environment factor in econometric models is understood as what influences activity of analyzed system but acts independent of the system. Problems of investi-gating environment factor’s influence in the decision support systems are related to receiving exact informa-tion about state of this factor. Unlike environment factor which acts as unknowing gambler decision making per-son is described as a conscious gambler. Market, social relations, nature, non-managed organization and other objects might be considered as environment factor while separate individual, group of decision making persons or managed organization are named as decision making person. Elements, that sophisticated system is made of, have their purposes and problems related to problems and purposes of the whole system to solve. Solution of every problem depends upon elements’ available amount of resources. Conflict situations come up because total resources of the whole system are limited but the pur-poses of different elements vary and it is difficult to com-bine amount of resources needed for solving problems of these elements with limitations of the whole system. How-ever the biggest problem when making decisions is the estimation of environment factor’s influence. Therefore it is very important to pay attention to the circumstances that environment states research should include evalua-tion of risk factor of receiving exact information from reliable source. If consultancy was paid for reliable in-formation soon, it is possible to incur large losses seeing that, after circumstances have changed this information might lose not only worth but also meaning. Therefore, if time for project implementation is t but managers have to make decision on fixed time moment t0 they must size up risk of using information about market states favor. Ac-cording to the opinion of the authors of this article it is considered appropriate to take ratio between time inter-val of all project implementation and time interval of change of information worth as risk valuation criterion. Time interval within information has lost its meaning in respect of decision making quality and was named as critical time. Critical time shows uncertainty level or, in the other words, it shows time interval in which it is not known how available information could be used. The Au-thors have analyzed three situations of critical time dis-placement and have made conclusion that displacement of critical time to the end of project implementation re-duces decision making risk. Therefore the main motiva-tion of decision making person should be based on exact information knowing risk of changes of this information meaning. Decision making person is always interested in states of environment factor and price of exact informa-tion about states of this factor.

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Motivation Factors of Decision Making Person

This article presents the results of the empiricalresearch performed in Lithuanian grand electricitycompanies in order to reveal the application of performancemeasurement systems (PMSs) at the electricity sector.The relevance of the performance measurement at theelectricity sector is determined by starting the process ofgradual electricity market liberalization which changesperformance conditions of companies operating in thissector. Scientific literature within the context of the analysisof such processes impact on the performance measurementand PMS in this sector is poor and fragmentary. This paperis the first one in which it is analyzed the performancemeasurement in Lithuanian electricity companies.Theoretical background of the research is based on theassumptions that the changing environment of anorganizational the performance has a direct impact on thechanges of performance measurement which, in its turn,are realized in close connection with the projects on reorganizingPMS (Ponikvar, Tajnikar and Pushnik, 2009;Gimzauskiene and Valanciene, 2009; Gimzauskiene andKloviene, 2010). According to this approach, theappropriate changes in electricity market allow to presumeby increasing the importance of the evaluation of nonfinancialindicators, herewith and the relevance of theapplication of modern PMSs.Following these presumptions, the features of theperformance measurement and changes of PMS due toelectricity market liberalization were analyzed. The researchwas performed in free types of electricity companies in orderto explore the specification of performance measurement andthe impact of market liberalization on it in different types ofcompanies. In total four Lithuanian grand electricitycompanies were researched which were selected by handilyselection method.The main results disclosed that due to short timeelectricity market liberalization still has not hadconsiderable impact on the performance measurement ofcompanies. Traditional attitude to performance measurementmostly based on financial indicators and traditionalfunctions of performance measurement was dominant.However, the research revealed that the importance of nonfinancialindicators was growing. These changes weremostly related with the increasing relevance of themeasurement of strategy implementation, customers andother stakeholder satisfaction and workers evaluation.Together with the indicators of these ranges it wasenvisaged the increasing relevance of the application ofmodern PMSs, especially in the company of electricitygeneration. The research disclosed that the increasingcompetition between independent suppliers graduallyincreased the importance of a competitive strategyformation and the measurement of non-financialindicators. Therefore, in this company the application ofmodern PMS as the means of strategy implementation wasforeseen more relevant in comparison with other types ofelectricity companies.

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Česlovas Christauskas

Papers

Cloud–Computing Based Accounting for Small to Medium Sized Business

Business Valuation Model Based on the Analysis of Business Value Drivers

Risk Reflection in Business Valuation Methodology

Motivation Factors of Decision Making Person

The Application of Performance Measurement Systems at the Electricity Sector of Lithuania