cultural differences in consumer impatience abstract in this article the authors examine cross cultural variations in how people discount the future specifically they predict that people from western cultures are relatively less patient and therefore discount the future to a greater degree than do people from eastern cultures and thus westerners value immediate consumption relatively more furthermore on the basis of regulatory focus theory the authors predict that when easterners are faced with the threat of a delay in receiving a product i e a prevention loss they are more impatient whereas when westerners are faced with the threat of not being able to enjoy a product early i e a promotion loss their impatience increases this enhanced impatience manifests in preference for expedited consumption of a product purchased online in two studies in both studies the authors used a priming methodology on bicultural singaporean participants the results support the predictions in the second study they also found evidence in support

trade offs in the investment decisons of european venture capitalists abstract previous studies of venture capital investment criteria which have tended to utilize traditional likert scaled survey methods have produced some general findings which indicate that the human factor is of utmost importance however virtually all of these studies have been undertaken with u s based venture capitalists in addition the studies have generally been exploratory and have assumed a single hierarchy of decision criteria in all cases and across all venture capitalists we do not accept that this is valid therefore our study tested this assumption by investigating the trade offs made by venture capitalists in europe thirty five investment criteria were identified from the literature and from experts in the field and a questionnaire was developed that required the venture capitalist to make 53 pairwise trade offs with multiple levels seventy three venture capitalists from across europe were interviewed and completed the questionnaire conjoint analysis was used to compute relative rankings and overall rankings were computed to provide some general insight into the overall importance of the various criteria after this cluster analysis was used to identify different decision groupings the trade offs were randomized in the questionnaire but for descriptive purposes fall into the following groupings financial product market strategic competitive fund management team management competence and deal all five management team criteria as opposed to management competence criteria were ranked among the first seven product market criteria appeared to be only moderately important and fund and deal criteria were at the bottom of the rankings overall we conclude that the venture capitalists interviewed would as a group prefer to select an opportunity that offers a good management team and reasonable financial and product market characteristics even if the opportunity does not meet the overall fund and deal requirements it appears quite logically that without the correct management team and a reasonable idea good financials are generally meaningless because they will never be achieved cluster analysis identified three groupings of venture capitalists those primarily concerned with investing nationally those who focus solely upon the deal and those mainstream investors who consistently and instinctively rank the five management team criteria at the top of their list however there was no evident country bias a conclusion that is sustained if the countries are grouped by physical proximity northern versus southern europe or by size of the local venture capital community a surrogate for experience moreover there was no relationship to the scale of the fund the typical round of financing or the apparent network the article concludes by outlining the implications of the study for venture capitalists entrepreneurs and the research community

stakeholder interviews with two mavt preference elicitation philosophies in a swiss water infrastructure decision aggregation using swing weighting and disaggregation using uta gms abstract we used two types of preference elicitation methods based on multi attribute value theory mavt for a wastewater infrastructure decision in switzerland we aimed to register the implementation impacts of two preference elicitation philosophies aggregation disaggregation in a large real world case and give guidance on these elicitation approaches for practitioners we conducted two series of face to face interviews with the same ten the first interview set used direct aggregation preference elicitation methods which decomposed an additive value model into the elicitation of weights smart swing variant and marginal value functions bi section method in the second interview series indirect disaggregation was used based on uta gms the weights and marginal value functions for 19 objectives were later simultaneously inferred with linear programming from pairwise comparisons of hypothetical alternatives one aim was to design the uta gms comparisons for many objectives further we aimed to identify differences and commonalities of the two methods concerning the elicited preferences the mavt evaluation results of six real world wastewater infrastructure alternatives and the stakeholders and analysts feedbacks similar best alternatives indicate convergence of the two elicitation methods this demonstrates the applicability of the uta gms elicitation procedure to a very complex decision problem however the two elicitation methods were perceived differently by the respondents and required different effort from the analysts for individual stakeholders preferences were sometimes rather different between the interviews which could be largely explained by the constructive nature of preference formation this indicates the importance of supporting stakeholder learning in the application of mcda

outcome signs question frames and discount rates this study explains why gain loss discount rate differences reported in previous studies cannot be attributed to outcome sign alone but rather must be associated with particular outcome sign question frame combinations to do so it extends loewenstein s 1988 framing model of intertemporal choice to negative outcomes and uses the resulting predictions to interpret and integrate the results of three previous studies comparing subjective discount rates thaler 1981 loewenstein 1988 benzion et al 1989 the new framework reveals previously unidentified linkages among outcome signs question frames and discount rates to investigate whether losses and gains are in fact discounted differently an experiment is conducted that includes a neutral frame intertemporal choice scenario no proposed change in outcome timing for each outcome sign the results show that subjective discount rates vary in a predictable way according to the outcome sign and question frame combination examined

modeling a multi attribute utility newsvendor with partial backlogging abstract traditional newsvendor models usually focus on single profit maximization or cost minimization approaches however making a monetary estimate of the consequences of lost sales as a result of shortages is often a difficult task for many practitioners besides there is still a lack of an explicit account of decision making judgments on the multiple consequences of making decisions with regard to order quantities in order to deal with this problem this paper presents a multi attribute utility model for the newsvendor problem with regard to profit the impacts of service level on corporate image and on customers goodwill and the impact on the environment arising from the disposal of unsold products demand is partially backlogged according to a decreasing exponential function of the waiting time the fundamental principles and limitations related to the application of the model built are also discussed

job search and hyperbolic discounting structural estimation and policy evaluation this paper estimates the structural parameters of a job search model with hyperbolic discounting and endogenous search effort it estimates quantitatively the degree of hyperbolic discounting and assesses its implications for the impact of various policy interventions aimed at reducing unemployment the model is estimated using data on unemployment spells and accepted wages from the national longitudinal survey of youth nlsy the likelihood function explicitly incorporates all the restrictions implied by the optimal dynamic programming solution to the model both observed and unobserved heterogeneity are accounted for the results point to a substantial degree of hyperbolic discounting especially for low and medium wage workers the structural estimates are also used to evaluate alternative policy interventions for the unemployed estimates based on a model with exponential discounting may lead to biased inference on the economic impact of policies jel c6 c73 d90 j64 j68

preference disaggregation 20 years of mcda experience abstract the philosophy of preference disaggregation in multicriteria decision aid systems mcda is to assess infer global preference models from the given preferential structures and to address decision aiding activities this paper presents a panorama of preference disaggregation methods and summarises the most important results and applications over the last 20 years

deferring versus expediting consumption the effect of outcome concreteness on sensitivity to time horizon abstract this work examines consumers preferences for consumption timing specifically the authors examine how temporal framing deferring versus expediting of a decision moderates the sensitivity of consumers pattern of discounting to changes in time horizon the results from three experiments show greater decline in consumers discount rates with time horizon i e greater present bias when they defer than when they expedite consumption these results are robust to using monetary and nonmonetary outcomes as well as to different time horizons months days the authors further demonstrate that the different levels of mental representations concreteness triggered by the two decision frames moderate this difference in sensitivity

subadditivity patience and utility the effects of dividing time intervals abstract previous work has demonstrated that time discounting is subadditive individuals exhibit more impatience evaluating a delay as divided into sub intervals this paper argues that subdivision affects both components of intertemporal choice the utility function as well as the intertemporal discount function in my first experiment i demonstrate that differential concavity of utility for gains and convexity for losses implies that the discounting of losses is even more subadditive than the discounting of gains individuals display even more relative impatience over divided time intervals for negative amounts of money than for positive amounts of money my second experiment utilizes alternative elicitation methods which impose an intertemporal status quo to highlight these utility effects subadditivity is stronger when delaying an early gain than for hastening a later gain the reverse pattern holds for losses discounting is more subadditive when hastening a later loss than for delaying an earlier loss

potential information and target variables for uk monetary policy the relationship between traditional monetary policy goal variables nominal gdp real gpd and the inflation rate and a number of financial market variables is investigated the question examined is which if any of these financial market variables monetary aggregates interest rates and interest rate spreads are potentially useful as either information variables or intermediate targets while the implications concerning the usefulness of the financial variables considered are pessimistic concerning nominal gdp more robust relationships are found for real gdp and inflation the latter finding is of interest given the current uk monetary policy strategy of inflation targeting our results are however more supportive of the usefulness of several financial variables as information variables than as intermediate targets

conflict dissolution in the public sector a case study abstract the construction of a new railway link to the port of lisbon has been postponed many times as a result of a conflict of different viewpoints held by various public stakeholders namely between the municipality of lisbon and the lisbon railway node bureau while the portuguese railway company has assumed a more flexible attitude over recent years three groups of solutions totalling nine alternative projects have been proposed by each of these three actors but none has been simultaneously accepted by all the three the development of the urbanisation plan for alc ntara the zone of the city where the railway line links to the port has presented an opportunity to try to dissolve the conflict this paper describes the multicriteria approach followed to support the creation of a new good win win compromise solution by the planning team based on the study of the consequences of the existing alternatives in particular we describe the structuring phase of the study and the use of a disaggregation aggregation approach to take into account the different value systems of the stakeholders

discounting behaviour and the magnitude effect evidence from a field experiment in denmark we evaluate the claim that individuals exhibit a magnitude effect in their discounting behaviour where higher discount rates are inferred from choices made with lower principals all else being equal if the magnitude effect is quantitatively significant it is not appropriate to use one discount rate that is independent of the scale of the project for cost benefit analysis and capital budgeting using data from a field experiment in denmark we find statistically significant evidence of a magnitude effect that is much smaller than is claimed this evidence surfaces only if one controls for unobserved individual heterogeneity in the population

properties of the social discount rate in a benthamite framework with heterogeneous degrees of impatience this paper derives the properties of the discount rate that should be applied to a public sector project when the affected population has heterogeneous degrees of impatience we show that for any distribution of discount rates the social discount rate has the following properties it decreases over time it is lower than the average of the discount rates in the population and it converges to the discount rate of the most patient individual in the economy these properties hold for both constant and decreasing individual discount rates finally we evaluate how changes in the distribution of individual discount rates affect the social discount rate

anomalies in intertemporal choice evidence and an interpretation research on decision making under uncertainly has been strongly influenced by the documentation of numerous expected utility eu anomalies behaviors that violate the expected utility axioms the relative lack of progress on the closely related topic of intertemporal choice is partly due to the absence of an analogous set of discounted utility du anomalies we enumerate a set of du anomalies analogous to the eu anomalies and propose a model that accounts for the anomalies as well as other intertemporal choice phenomena incompatible with du we discuss implications for savings behavior estimation of discount rates and choice framing effects

consumption self control by rationing purchase quantities of virtue and vice consumers attempts to control their unwanted consumption impulses influence many everyday purchases with broad implications for marketers pricing policies addressing theoreticians and practitioners alike this paper uses multiple empirical methods to show that consumers voluntarily and strategically ration their purchase quantities of goods that are likely to be consumed on impulse and that therefore may pose self control problems for example many regular smokers buy their cigarettes by the pack although they could easily afford to buy 10 pack cartons these smokers knowingly forgo sizable per unit savings from quantity discounts which they could realize if they bought cartons by rationing their purchase quantities they also self impose additional transactions costs on marginal consumption which makes excessive smoking overly difficult and costly such strategic self imposition of constraints is intuitively appealing yet theoretically problematic the marketing literature lacks operationalizations and empirical tests of such consumption self control strategies and of their managerial implications this paper provides experimental evidence of the operation of consumer self control and empirically illustrates its direct implications for the pricing of consumer goods moreover the paper develops a conceptual framework for the design of empirical tests of such self imposed constraints on consumption in consumer goods markets within matched pairs of products we distinguish relative virtue and vice goods whose preference ordering changes with whet her consumers evaluate immediate or delayed consumption consequences for example ignoring long term health effects many smokers prefer regular relative vice to light relative virtue cigarettes because they prefer the taste of the former however ignoring these short term taste differences the same smokers prefer light to regular cigarettes when they consider the long term health effects of smoking these preference orders can lead to dynamically inconsistent consumption choices by consumers whose tradeoffs between the immediate and delayed consequences of consumption depend on the time lag between purchase and consumption this creates a potential self control problem because these consumers will be tempted to over consume the vices they have in stock at home purchase quantity rationing helps them solve the self control problem by limiting their stock and hence their consumption opportunities such rationing implies that per purchase occasion vice consumers will be less likely than virtue consumers to buy larger quantities in response to unit price reductions such as quantity discounts we first test this prediction in two laboratory experiments we then examine the external validity of the results at the retail level with a field survey of quantity discounts and with a scanner data analysis of chain wide store level demand across a variety of different pairs of matched vice regular and virtue reduced fat calorie or caffeine etc product categories the analyses of these experimental field and scanner data provide strong convergent evidence of a characteristic crossover in demand schedules for relative vices and virtues for categories as diverse as among others potato chips chocolate chip cookies cream cheese beer soft drinks ice cream and frozen yogurt chewing gum coffee and beef andturkey bologna vice consumers demand increases less in response to price reductions than virtue consumers demand although their preferences are not generally weaker for vices than for virtues constraints on vice purchases are self imposed and strategic rather than driven by simple preferences we suggest that rationing their vice inventories at the point of purchase allows consumers to limit subsequent consumption as a result of purchase quantity rationing however vice buyers forgo savings from price reductions through quantity discounts effectively paying price premiums for the opportunity to engage in self control thus purchase quantity rationing vice consumers are relatively price in sensitive from a managerial and public policy perspective our findings should offer marketing practitioners in many consumer goods industries new opportunities to increase profits through segmentation and price discrimination based on consumer self control they can charge premium prices for small sizes of vices relative to the corresponding quantity discounts for virtues virtue consumers on the other hand will buy larger amounts even when quantity discounts are relatively shallow a key conceptual contribution of this paper lies in showing how marketing researchers can investigate a whole class of strategic self constraining consumer behaviors empirically moreover this research is the first to extend previous theoretical work on impulse control by empirically demonstrating its broader implications for marketing decision making

quantitative goals for monetary policy we study empirically the macroeconomic effects of an explicit de jure quantitative goal for monetary policy quantitative goals take three forms exchange rates money growth rates and inflation targets we analyze the effects on inflation of both having a quantitative target and of hitting a declared target our empirical work uses an annual data set covering 42 countries between 1960 and 2000 and takes account of other determinants of inflation such as fiscal policy the business cycle and openness to international trade and the endogeneity of the monetary policy regime we find that both having and hitting quantitative targets for monetary policy is systematically and robustly associated with lower inflation the exact form of the monetary target matters somewhat especially for the sustainability of the monetary regime but is less important than having some quantitative target successfully achieving a quantitative monetary goal is also associated with less volatile output

an alternative monetary policy target for most of the period since the mid 1970s the federal reserve has expressed its monetary policy intentions by announcing the target growth rates of three principal monetary aggregates the simple sum m1 m2 and m3 however the sweeping changes and the deregulation in the financial industry have greatly affected the relevance of these traditional monetary aggregates the unusual behaviour of the simple sum monetary aggregates has forced the federal reserve to stop setting target range for m1 the measuring of monetary aggregates has become a controversial question this paper constructs the new benchmark divisia monetary indexes which reflect moneyness more accurately than the old divisia indexes i demonstrate that the historical trends of the divisia monetary indexes are sensitive to the brenchmark rates chosen in constructing these indexes in addition i compare the forecasting performance of the new benchmark divisia monetary indexes with the simple sum and the old divisia monetary indexes in the

impatience incentives and obesity this paper explores the relationship between time preferences economic incentives and body mass index bmi using data from the 2006 national longitudinal survey of youth we rst show that greater impatience increases bmi and the likelihood of obesity even after controlling for demographic human capital occupational and nancial characteristics as well as risk preference next we provide evidence of an interaction

agricultural product development using multidimensional and multicriteria analyses the case of wine abstract multicriteria analysis and multidimensional statistical methods can collaborate and offer new prospects in the fields of decision support and management in general this paper presents a survey based methodology which combines a multicriteria model for the consumer s preference analysis as well as classical data analysis models to design agricultural products the new products are developed in such a way that they eventually achieve the maximum possible market share a real study for the athenian wine market is presented for illustration the paper concludes with some further reccomendations

implausible alternatives in eliciting multi attribute value functions abstract many methods to elicit preference models in multi attribute decision making rely on evaluations of a set of sample alternatives by decision makers using orthogonal design methods to create this set of alternatives might require respondents to evaluate unrealistic alternatives in this paper we perform an empirical study to analyze whether the presence of such implausible alternatives has an effect on the quality of utility elicitation using a new approach to measure consistency we find that implausible alternatives in fact have a positive effect on consistency of intra attribute preference information and consistency with dominance but do not affect inter attribute preference information

quantitative goals for monetary policy a quantile regression approach a recent paper by fatas et al 2006 indicates that formal monetary policy targets exchange rate money supply or inflation targets palpably decrease inflation in a sample of 40 countries the authors employ various least squares estimations which pick up the conditional average effect however there is wide inflation variability in the authors sample thus formal targets could have very different effects in high and low inflation countries accordingly we utilize the technique of quantile regression a method frequently used in labour economics we find in a sample of low and moderate inflation countries that formal targets exert no significant impact on low inflation nations this result is important for debates over formal targets such as whether the united states should adopt an inflation target there are costs and benefits in having formal targets and finding that targets do not decrease inflation when it is already moderate is an important piece of information to consider

frames of mind in intertemporal choice recent research has demonstrated that choices between gambles are systematically influenced by the way they are expressed kahneman and tversky s prospect theory kahneman d a tversky 1979 prospect theory an analysis of decision under risk econometrica472 363 391 explains many of these framing effects as shifts in the point of reference from which prospects are evaluated this paper demonstrates the applicability of the reference point concept to intertemporal choice three experiments demonstrate that when people choose between immediate and delayed consumption the reference point used to evaluate alternatives can significantly influence choice the first study elicited relative preference for immediate and delayed consumption using three methods each of which differently framed choices between alternatives offering identical end state consumption the conventional discounted utility model predicts that the three methods of elicitation should yield similar estimates of time preference but preferences were found to differ in accordance with a reference point model the second and third studies extend and replicate the results from the first the third using real rather than hypothetical choices

corporate failure prediction in the european energy sector a multicriteria approach and the effect of country characteristics this study examines the development of corporate failure prediction models for european firms in the energy sector using a large dataset from 18 countries the construction of the models is based on a multiple criteria decision aid mcda approach taking into account both ordinal criteria and nominal country sector effects the analysis is based on different modeling specifications first traditional financial variables are examined which are then extended with additional country level data related to the economic and business environment as well as data about the energy efficiency policies of the countries and the characteristics of their energy markets and networks the results indicate that energy related attributes have high discriminating power and add valuable information compared to the other attributes

multicriteria decision aid in financial management abstract the financial decisions of an organization are usually included in the context of optimization concerning a long term period there are decisions related to the optimal allocation of funds and decisions related to the optimal financial structure in the short term case the decisions are related to the optimization of stocks cash accounts receivable current liabilities etc the financial theory analyzes these decisions mainly from an optimal point of view the optimal character of such decisions has led researchers to propose operations research techniques to solve the problems that are inherent in such decisions this paper examines the contribution of multicriteria analysis in solving financial decision problems in a realistic context the paper also includes an extensive bibliography on the subject

multiple criteria decision making combined with finance a categorized bibliographic study abstract this paper provides a categorized bibliography on the application of the techniques of multiple criteria decision making mcdm to problems and issues in finance a total of 265 references have been compiled and classified according to the methodological approaches of goal programming multiple objective programming the analytic hierarchy process etc and to the application areas of capital budgeting working capital management portfolio analysis etc the bibliography provides an overview of the literature on mcdm combined with finance shows how contributions to the area have come from all over the world facilitates access to the entirety of this heretofore fragmented literature and underscores the often multiple criterion nature of many problems in finance

fast growing small entrepreneurial firms and their venture capital backers an applied principal agent analysis first the empirical background of the u k venture capital industry is developed using a panel of major u k venture capital funds over the period 1988 92 then a framework for applied principal agent analysis is developed focusing on risk management and information under risk management it explores attitude to risk risk sharing and bearing and the effects of risk bearing on effort under information handling it explores information systems information asymmetries between investor venture capitalist and investee entrepreneur and ways of attenuating them and information variance and costs finally the contract between investor and investee is seen as a device for trading risk and information the implications of this trading for risk bearing effort and efficiency are explored the whole analysis is supported by a detailed case study which reflects current practice in the u k venture capital industry the evidence provides striking confirmation of the applicability of the principal agent model to the venture capital financing of hightech ventures

controlling inflation in euroland the experience with the two pillar strategy of the european central bank ecb suggests that at some point in the future the ecb may have to commit to one of the more traditional policy strategies a direct inflation target or an intermediate monetary target this study offers some information on the scale of control and indicator problems associated with both strategies we estimate the links between monetary policy actions and inflation in dynamic linear models with the kalman filter using european m3 that the ecb has published it is found that the overall control problems involved in targeting money are larger than for direct inflation targets

optimal monetary policy and the role of hybrid inflation price level targets this study investigates the role of hybrid inflation price level targets as a solution to the well known stabilization bias problem that arises under discretionary policies the analysis shows that social welfare will be improved by employing a weighted average of inflation and price level as one of the central bank s target variables in addition to the output gap growth target the reason is that imposing the optimal hybrid target will reduce inflation variability in a highly efficient way in particular the optimal hybrid regime outperforms other previously suggested regimes when the degree of inflation persistence is moderate

endogenous time preferences of forest goods and community based forest management abstract in the economic analysis of cbfm people s discount rates are assumed exogenous and same for all goods we examined the validity of this assumption by eliciting the discount rates of households for grass timber fuelwood and money and analyzed the impacts of various personal and economic factors on households discount rates we found that time preferences are endogenous and good specific a good proportion of households have infinite discount rates for forest goods the mean values of monthly discount rates for households that indicated finite discount rates are 0 67 for timber 6 83 for fuelwood 55 49 for grass and 3 47 for money the availability of alternative sources and current consumption of the forest goods are two main determinants of a household s discount rates the study provides many useful insights for the design and implementation of cbfm programs the concept of mental accounting should be used for economic analyses of cbfm programs different management strategies should be adopted for different forest goods and alternative sources should be provided to meet the current needs of the households

including sustainability criteria into inventory models research on sustainability performance has considerably enriched operations management literature in recent years however work with quantitative models is still scarce this paper contributes by revisiting classical inventory methods taking sustainability concerns into account we believe that reducing all aspects of sustainable development to a single objective is not desirable we thus reformulate the classical economic order quantity model as a multiobjective problem we refer to this model as the sustainable order quantity model then a multi echelon extension of the sustainable order quantity model is studied for both models the set of efficient solutions pareto optimal solutions is analytically characterized these results are used to provide some insights about the effectiveness of different regulatory policies to control carbon emissions we also use an interactive procedure that allows the decision maker to quickly identify the best option among these solutions the proposed interactive procedure is a new combination of multi criteria decision analysis techniques

modeling the psychology of consumer and firm behavior with behavioral economics abstract marketing is an applied science that tries to explain and influence how firms and consumers behave in markets marketing models are usually applications of standard economic theories which rely on strong assumptions of rationality of consumers and firms behavioral economics explores the implications of the limits of rationality with the goal of making economic theories more plausible by explaining and predicting behavior more accurately while maintaining formal power this article reviews six behavioral economics models that are useful to marketing three models generalize standard preference structures to allow for sensitivity to reference points and loss aversion social preferences toward outcomes of others and preference for instant gratification the other three models generalize the concept of game theoretic equilibrium allowing decision makers to make mistakes encounter limits on the depth of strategic thinking and equilibrate by learning from feedback the authors also discuss a sp

a model of venture capitalist investment activity the paper describes the activities of venture capitalists as an orderly process involving five sequential steps these are 1 deal origination the processes by which deals enter into consideration as investment prospects 2 deal screening a delineation of key policy variables which delimit investment prospects to a manageable few for in depth evaluation 3 deal evaluation the assessment of perceived risk and expected return on the basis of a weighting of several characteristics of the prospective venture and the decision whether or not to invest as determined by the relative levels of perceived risk and expected return 4 deal structuring the negotiation of the price of the deal namely the equity relinquished to the investor and the covenants which limit the risk of the investor 5 post investment activities the assistance to the venture in the areas of recruiting key executives strategic planning locating expansion financing and orchestrating a merger acquisition or public offering 41 venture capitalists provided data on a total of 90 deals which had received serious consideration in their firms the questionnaire measured the mechanism of initial contact between venture capitalist and entrepreneur the venture s industry the stage of financing and product development ratings of the venture on 23 characteristics an assessment of the potential return and perceived risk and the decision vis i vis whether to invest the modal venture represented in the database was a start up in the electronics industry with a production capability in place and seeking 1 million median in outside financing there is a high degree of cross referrals between venture capitalists particularly for the purposes of locating co investors factor analysis reduced the 23 characteristics of the deal to five underlying dimensions namely 1 market attractiveness size growth and access to customers 2 product differentiation uniqueness patents technical edge profit margin 3 managerial capabilities skills in marketing management finance and the references of the entrepreneur 4 environmental threat resistance technology life cycle barriers to competitive entry insensitivity to business cycles and down side risk protection 5 cash out potential future opportunities to realize capital gains by merger acquisition or public offering the results of regression analyses showed expected return to be determined by market attractiveness and product differentiation r2 0 22 perceived risk is determined by managerial capabilities and environmental threat resistance r2 0 33 finally a discriminant analysis correctly predicted in 89 4 of the cases whether or not a venture capitalist was willing to commit funds to the deal on the basis of the expected return and perceived risk the reactions of seven venture capitalists who reviewed the model s specification were used to test its validity

decision support systems for semi structured buying decisions abstract using recent research on evolutionary systems design and on the process of learning preferences in multicriteria decision making a decision support system dss is proposed for semi structured buying decisions the general decision process model involves four phases and feedbacks among them 1 1 selecting criteria and an admissible set of alternatives products 2 2 searching for consistency between the decision maker s wholistic preference and an analytical model of it 3 3 assesing a compromise preference model 4 4 evaluating the alternative products using the compromise preference model an illustrative example purchasing a car is presented we conclude with some brief remarks on implementation of the dss on microcomputers and extension to the case of several decision makers

the shape of utility functions and organizational behavior based on measurements among 332 owner managers we investigate how theglobal shape of the utility function i e s shaped versus concave or convex over the total range of outcomes relates to choice behavior we find that the global shape of the utility function differs across decision makers about one third of the owner managers exhibit an s shaped utility function and that the global shape is linked to organizational behavior i e the production system employed a result that does not change when using different methods to identify the decision maker s global shape of the utility function the decision maker s risk attitude risk averse or risk seeking does not affect the choice of the production system whereas the degree of risk aversion based on thelocal shape of the utility function may be important in explaining owner managers trading behavior pennings and smidts 2000 more structural organizational behavior appears to be linked to theglobal shape of the utility function

discount rates inferred from decisions an experimental study two hundred and four students of economics and finance participated in an intertemporal choice experiment which manipulated three dimensions in a 4 4 4 factorial design scenario postponing a receipt postponing a payment expediting a receipt expediting a payment time delay 0 5 1 2 and 4 years and size of cashflow 40 200 1000 and 5000 individual discount rates were inferred from the responses and then used to test competitively four hypotheses regarding the behavior of discount rates the classical hypothesis asserting that the discount rate is uniform across scenarios time delays and sums of cashflow was flatly rejected a market segmentation approach was found lacking the results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value and an added compensation hypothesis which asserts that individuals require compensation for a change in their financial position

decreasing impatience a criterion for non stationary time preference and hyperbolic discounting despite recent interest in hyperbolic discounting there has been little discussion of exactly what property of time preferences is instantiated by hyperbolic or quasi hyperbolic functional forms the paper revives an earlier proposal in prelec 1989 that the key property is prattarrow convexity of the log of the discount function which corresponds to decreasing impatience di at the level of preferences di provides a natural criterion for assessing the severity of departure from stationarity in that greater di is equivalent to more choices of dominated options in two stage decision problems as well as greater convexity of the log of the discount function inefficient choices may arise as intentional precommitments or as unintended reversals of preference by naive agents

discounting by intervals a generalized model of intertemporal choice according to most models of intertemporal choice an agent s discount rate is a function of how far the outcomes are removed from the present and nothing else this view has been challenged by recent studies which show that discount rates tend to be higher the closer the outcomes are to one another subadditive discounting and that this can give rise to intransitive intertemporal choice we develop and test a generalized model of intertemporal choice the discounting by intervals dbi model according to which the discount rate is a function of both how far outcomes are removed from the present and how far the outcomes are removed from one another the model addresses past challenges to other models most of which it includes as special cases as well as the new challenges presented in this paper our studies show that when the interval between outcomes is very short discount rate tends to increase with interval length superadditive discounting in the discussion we place our model and evidence in a broader theoretical context

anticipation and the valuation of delayed consumption this paper presents a model of intertemporal choice that incorporates savoring and dread i e utility from anticipat ion of delayed consumption the model explains why an individual with positive time preference may delay desirable outcomes or get unpleas ant outcomes over with quickly contrary to the prediction of convent ional formulations of intertemporal choice implications of savoring and dread for savings behavior empirical estimation of discount rate s and public policy efforts to combat myopic behavior are explored the model provides an explanation for common violations of the indepe ndence axiom as applied to intertemporal choice copyright 1987 by royal economic society

a preference disaggregation decision support system for financial classification problems abstract classification is one of the most extensively studied problems in the fields of multivariate statistical analysis operations research and artificial intelligence decisions involving a classification of the alternative solutions are of major interest in finance since several financial decision problems are best studied by classifying a set of alternative solutions firms loan applications investment projects etc in predefined classes this paper proposes an alternative approach to the classical statistical methodologies that have been extensively used for the study of financial classification problems the proposed methodology combines the preference disaggregation approach a multicriteria decision aid method with decision support systems more specifically the financial classification finclas multicriteria decision support system is presented the system incorporates a plethora of financial modeling tools along with powerful preference disaggregation methods that lead to the development of additive utility models for the classification of the considered alternatives into predefined classes an application in credit granting is used to illustrate the capabilities of the system

tying odysseus to the mast evidence from a commitment savings product in the philippines we designed a commitment savings product for a philippine bank and implemented it using a randomized control methodology the savings product was intended for individuals who want to commit now to restrict access to their savings and who were sophisticated enough to engage in such a mechanism we conducted a baseline survey on 1777 existing or former clients of a bank one month later we offered the commitment product to a randomly chosen subset of 710 clients 202 28 4 percent accepted the offer and opened the account in the baseline survey we asked hypothetical time discounting questions women who exhibited a lower discount rate for future relative to current trade offs and hence potentially have a preference for commitment were indeed significantly more likely to open the commitment savings account after twelve months average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group we conclude that the savings response represents a lasting change in savings and not merely a short term response to a new product

inflation targeting and switch of fiscal regime in new zealand monetary policy cannot be adequately addressed without also specifying fiscal policy i interpret the economic reforms in new zealand in the 1980s using a simple model that includes reaction functions of both monetary and fiscal policy the interpretation is based on the wealth effects of the government debt the successful and sustainable shift in monetary policy regime in new zealand was supported by a compatible switch in fiscal policy

a multi criteria evaluation framework for tradable white certificate schemes recent years have witnessed regained political momentum on energy efficiency and interest in establishing markets is growing as a result tradable white certificate twc schemes of differing design have been implemented in great britain italy and france much attention is being paid to justifying and evaluating such schemes in this paper we develop and apply a multi criteria framework for evaluating twc schemes an approach that attempts to cover their individual design features a broad evaluation is conducted regarding energy saving and environmental effectiveness economic efficiency cost effectiveness transaction costs political feasibility administrative burden and technical change the results show the design and performance of twc schemes to be case and context specific and generalisations are thus inappropriate this evaluation supports the cost effectiveness modelled for the british scheme and the assumption that a twc scheme is an economically efficient policy instrument for the other more complex twc schemes more data and experience are needed to judge their ex post merit on the whole the proposed multi criteria evaluation requires considerable data and complementary methods however the framework improves the understanding of the broad effects and attributes of twc schemes it deals with various empirical and normative aspects that can be applied in their evaluation

the evaluation criteria of the venture capital investment activity an interactive assessment abstract in this paper the modelling of venture capital decision making is being attempted using a multicriteria decision support system the minora system based on the interactive use of the uta ordinal regression model first a review of the literature on the evaluation criteria for venture capital investment is outlined and the general methodology of financing firms is presented then a real world application of the minora system is developed this has been done in a french venture capital firm and concerned the assessment of an analytical evaluation model of firms