The paper examines the random preference model, which can explain inherent variability of preferences in managerial and individual decision making and provides axiomatizations for the utility components of two such models differentiated by the structure of core preferences: expected utility (EU) and betweenness-like preferences. We then examine the possibility of violations of weak stochastic transitivity for these models and for a model with core dual EU preferences. Such violations correspond to the existence of Condorcet cycles, and therefore, the analysis has implications for managerial decision making and for majority rule voting. The paper also investigates implications of its findings for two popular experimental settings. This paper was accepted by James Smith, decision analysis.

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Intrinsic Variability in Group and Individual Decision Making

A note on the theory of the firm under multiple uncertainties

Variability, Noise, and Error in Decision Making Under Risk

Stochastic models for risky choices: A comparison of different axiomatizations

This work provides a general risk management procedure applied to synchronized supply chains. After conducting a literature review and taking the international standard ISO 28000 and ISO 31000 as a reference. The most important steps that enable organizations to carry out supply chain risk management are described. Steps such as defining the context, identifying and analyzing risks or avoiding them, controlling them and mitigating them are some of the main points of this work. On the other hand, we carried out a practical case in which the execution of this procedure is carried out in a real supply chain located in the city of Jaen. In this specific case study, the most important risks and those that require early treatment will be discussed. In addition, a series of suggestions and ideas will be established, by way of conclusions, that allow said organization to improve the results that we have obtained in risk management.

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Risk management methodology in the supply chain: a case study applied

In this paper, we consider a model of production allocation in the context of the theory of the firm under uncertainty This is the case of a firm that has just produced a known amount of an output and can allocate it to two possible ends: one with a certain price, the other with an uncertain price We first establish conditions to determine whether the firm will make use of both ends or of only one of them In particular, we find a limit value for the certain price (which we call the frontier price) below which the firm decides to allocate the total amount of production to the uncertain end We then study comparative-static effects on the optimal output allocated to each end, and also on the frontier price Finally, we analyze an application concerning the middleman who buys the firm’s output in the certain end This is a pricing problem: namely obtaining the price in the certain end that the middleman must offer to the producer in order to attain a desired amount of output In two specific cases, we also provide closed-form expressions for the optimal allocation to both ends and for the frontier price

Optimal allocation of a fixed production under price uncertainty

We present examples of existing evidence that lead us to be cautious about claims made in the original paper [Blavatskyy PR 2011 A model of probabilistic choice satisfying first-order stochastic dominance. Management Sci. 573:542--548] that the proposed model provides a better fit to experimental data than do existing models. We raise concerns about the accuracy of this and other assertions and about the adequacy of the comparisons made with alternative models in the existing literature.

This paper was accepted by Rakesh Sarin, decision analysis.

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Comment on “A Model of Probabilistic Choice Satisfying First-Order Stochastic Dominance” by Pavlo Blavatskyy

We show a simple methodology (or scheme to work) to study comparative-static effects in some models of the theory of the firm under uncertainty. We present this methodology in detail for a basic production model with only one decision variable (SANDMO’s model). Then we sketch it for a model with two decision variables (HOLTHAUSEN’s model with a forward market), and for a model of optimal allocation of production (a two-ends model, of our own).

A Methodological Contribution in the Theory of the Firm Under Uncertainty

En este trabajo presentamos una reformulacion de un lema de Lippman y McCall -inicialmente planteado para una unica variable aleatoria- que permite que sea aplicado al caso de varias variables aleatorias, e ilustramos su utilizacion en la teoria de la empresa bajo incertidumbre. Llevamos esto a cabo en un modelo reciente de la teoria, para el cual mostramos como el lema permite comparar, de forma mas directa que la utilizada por sus autores, los respectivos niveles optimos que elige la empresa con y sin incertidumbre. Tambien hacemos uso del lema, en este mismo modelo, para estudiar el efecto de una variacion en la aversion al riesgo, el cual no habia sido estudiado anteriormente. ------------------------------------ In this paper we present a reformulation of a lemma due to Lippman and McCall -initially formulated a unique random variable- to be applied to the case of several random variables, and we illustrate its use in the theory of the firm under uncertainty. We have performed this on a recent model of the theory, for which the respective optimal levels chosen by the firm with and without uncertainty are compared in a more direct way than that used originally by its authors. We also make use of the lemma, in the context of the same model, to study the effect of a variation in risk aversion, which had not been studied before.

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Una herramienta de análisis teórico en la teoría de la empresa bajo incertidumbre // A Theoretical Analysis Tool in the Theory of the Firm under Uncertainty

A private placement is the sale of securities as a way of raising capital. Most private placements are offered to a small number of select investors, at a fixed rate that can be set by the issuer. The solicitation of investors can be simultaneous or sequential, and the chosen style may influence the associated cost. Sequential solicitation is generally more expensive over time since it is carried out gradually, although simultaneous solicitation can be more expensive if it involves a greater number of investors. In this paper, a theoretical model is developed that allows the two styles of solicitation to be compared. It is demonstrated that sequential solicitation generally involves a lower cost than simultaneous solicitation, although it does require a greater number of investors. Conditions are determined under which these two styles of solicitation are equivalent in cost and in the number of investors required. Specifically, it is obtained that, if the group of investors is homogeneous, then both styles of solicitation will have the same monetary cost and will require the same number of investors.

Inmaculada Rodríguez-Puerta

Papers

Optimal allocation of a fixed production under price uncertainty

Comment on “A Model of Probabilistic Choice Satisfying First-Order Stochastic Dominance” by Pavlo Blavatskyy

A Methodological Contribution in the Theory of the Firm Under Uncertainty

Una herramienta de análisis teórico en la teoría de la empresa bajo incertidumbre // A Theoretical Analysis Tool in the Theory of the Firm under Uncertainty

A model for the optimal selection of lenders