Search results for: dynamic-decision-theory

Dynamic Decision Theory

Author : Günter Haag
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Choice processes appear in all spheres of society. Hitherto ruling paradigms in the modelling of choice problems have presumed a competitive general equi librium which, however, proves insufficient for dynamic processes. This contribution aims at providing a general coherent and closed frame work for the dynamic modelling of decision processes. It was one of my main interests to build a bridge between the pure model building concepts and their practical applications. Therefore all given examples are related to empirical work. Solution algorithms for the estimation of trend parameters as well as the numerical simulation in concrete applications therefore playa central role in this contribution. Friendly relations with a number of colleagues from many universities in Europe, and the U.S. have emerged during the different applications. I wish to thank all of them. The international cooperations were mainly initiated and supported by conferences and workshops organized and financed by the International Institute for Applied Systems Analysis (lIASA), the Istituto Ricerche Economico-Sociali Del Piemonte (I RES). the Institut National D 'Etudes De'mographiques (I NED), the Centre for Regional Science Research UmeJ. (CERUM) and the Projets de Cooperation et D'Echange avec France (Procop>' Special thanks go to the Volkswagen Stiftung for financial support of this work over the years. Thanks also go in particular to my friend and mentor Prof.W.Weidlich for his encouragement and for the many suggestions he made in fruitful discus sions and common work that have taken place over the years.

Dynamic Decision Theory

Author : Gary L. Haag
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Dynamic Decision Theory

Author : Günter Haag
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Complex Decision Making

Author : Hassan Qudrat-Ullah
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Today's ever more complex world creates challenges for decision makers. This volume reviews the principles underlying complex decision making, the handling of uncertainties in dynamic environments, and the various modeling approaches. Beginning with a discussion of the underlying concepts, theories and empirical evidence, the book gives you a range of practical tools and techniques for decision making in complex environments and systems.

Efficiency versus Sustainability in Dynamic Decision Making

Author : Bodo Glaser
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To all who taught me, and to all who will. Over the past fifteen years the notions of efficiency and sustainability have, more than any others, influenced the academic and public discussion concerning the intertemporal allocation of resources, especially as regards the economics of growth and environment. This treatise formally develops and counterposes these notions by means of the construct of a trajectorial objective, which is here developed, along with its implications, as a natural advance upon the classical scalar objective. In the course of this study it becomes clear that efficiency and sustainability are by no means identical, given that efficiency, on the one hand, is the concept for avoiding wasteful behavior, and sustainability, on the other, is the concept for ensuring that certain critical aspiration levels, which usually reflect the wish for survival, are maintained. Nonetheless, contrary to what may be assumed, these two concepts do not generally yield mutually exclusive solutions; in fact, they can be combined to complement each other in the quest for unimprovable long-term solutions which sustain given and necessary aspiration levels. This treatise develops and analyzes dynamic decision models (DDM) with one trajectorial objective according to the methodology of multi criteria decision making (MCDM). Moreover, introducing the method of distance maximization crucially augments MCDM and proves to be invaluable for DDMs in the case of a nonexistent utopia trajectory as well as in the case of sustainability as objective.

Dynamic Decision Theory and Probabilistic Information Processing

Author : Ward Edwards
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Adaptive Computer Aiding in Dynamic Decision Processes An Initial Study in Dynamic Utility Convergence and Decision Aiding

Author : Richard L. Weisbrod
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One central goal of the decision theory is to provide a rational basis for decision making. The ADDAM (Adaptive Dynamic Decision Aiding Mechanism) System is designed to aid the decision maker (DM) in performing dynamic decision tasks. The ADDAM system provides real-time dynamic assessments of multiple utilities as the DM performs a dynamic decision task. ADDAM continuously tracks the DM's decision responses and uses adaptive pattern classification techniques to learn his utilities for their outcomes. These Utilities are then used to provide decision aiding of various forms, including recommendation of maximum expected utility decisions. The results of an initial experiment to investigate the effectiveness of the adaptive decision modeling system and the DM's acceptance of the model as a normative basis for decision making are reported.

Judgment and Decision Making

Author : Peter Juslin
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Research on human judgment and decision making has been strongly guided by a normative/descriptive approach, according to which human decision making is compared to the normative models provided by decision theory, statistics, and the probability calculus. A common empirical finding has been that human behavior deviates from the prescriptions by normative models--that judgments and decisions are subject to cognitive biases. It is interesting to note that Swedish research on judgment and decision making made an early departure from this dominating mainstream tradition, albeit in two different ways. The Neo-Brunswikian research highlights the relationship between the laboratory task and the adaptation to a natural environment. The process-tracing approach attempts to identify the cognitive processes before, during, and after a decision. This volume summarizes current Swedish research on judgment and decision making, covering topics, such as dynamic decision making, confidence research, the search for dominance structures and differentiation, and social decision making.

Intuitive Dynamic Decision Making

Author : Robert J. Meyer
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Dynamic Decision Theory

Author : G. Haag
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Choice processes appear in all spheres of society. Hitherto ruling paradigms in the modelling of choice problems have presumed a competitive general equi librium which, however, proves insufficient for dynamic processes. This contribution aims at providing a general coherent and closed frame work for the dynamic modelling of decision processes. It was one of my main interests to build a bridge between the pure model building concepts and their practical applications. Therefore all given examples are related to empirical work. Solution algorithms for the estimation of trend parameters as well as the numerical simulation in concrete applications therefore playa central role in this contribution. Friendly relations with a number of colleagues from many universities in Europe, and the U.S. have emerged during the different applications. I wish to thank all of them. The international cooperations were mainly initiated and supported by conferences and workshops organized and financed by the International Institute for Applied Systems Analysis (lIASA), the Istituto Ricerche Economico-Sociali Del Piemonte (I RES). the Institut National D 'Etudes De'mographiques (I NED), the Centre for Regional Science Research UmeJ. (CERUM) and the Projets de Cooperation et D'Echange avec France (Procop>' Special thanks go to the Volkswagen Stiftung for financial support of this work over the years. Thanks also go in particular to my friend and mentor Prof. W. Weidlich for his encouragement and for the many suggestions he made in fruitful discus sions and common work that have taken place over the years.

Effects of Feedback Structure on Dynamic Decision Making

Author : Ernest-Walter Diehl
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Anticipatory Optimization for Dynamic Decision Making

Author : Stephan Meisel
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The availability of today’s online information systems rapidly increases the relevance of dynamic decision making within a large number of operational contexts. Whenever a sequence of interdependent decisions occurs, making a single decision raises the need for anticipation of its future impact on the entire decision process. Anticipatory support is needed for a broad variety of dynamic and stochastic decision problems from different operational contexts such as finance, energy management, manufacturing and transportation. Example problems include asset allocation, feed-in of electricity produced by wind power as well as scheduling and routing. All these problems entail a sequence of decisions contributing to an overall goal and taking place in the course of a certain period of time. Each of the decisions is derived by solution of an optimization problem. As a consequence a stochastic and dynamic decision problem resolves into a series of optimization problems to be formulated and solved by anticipation of the remaining decision process. However, actually solving a dynamic decision problem by means of approximate dynamic programming still is a major scientific challenge. Most of the work done so far is devoted to problems allowing for formulation of the underlying optimization problems as linear programs. Problem domains like scheduling and routing, where linear programming typically does not produce a significant benefit for problem solving, have not been considered so far. Therefore, the industry demand for dynamic scheduling and routing is still predominantly satisfied by purely heuristic approaches to anticipatory decision making. Although this may work well for certain dynamic decision problems, these approaches lack transferability of findings to other, related problems. This book has serves two major purposes: ‐ It provides a comprehensive and unique view of anticipatory optimization for dynamic decision making. It fully integrates Markov decision processes, dynamic programming, data mining and optimization and introduces a new perspective on approximate dynamic programming. Moreover, the book identifies different degrees of anticipation, enabling an assessment of specific approaches to dynamic decision making. ‐ It shows for the first time how to successfully solve a dynamic vehicle routing problem by approximate dynamic programming. It elaborates on every building block required for this kind of approach to dynamic vehicle routing. Thereby the book has a pioneering character and is intended to provide a footing for the dynamic vehicle routing community.

Managing Foodservice Commissaries

Author : Catherine Erma Ralston
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Decision Theory

Author : Douglas John White
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Some concepts and their interpretation; Theories of choice, value and uncertainty; Decidability; Some practical considerations in decision analysis; Information for decision; Pragmatic aspects of decision theory; Mathematical models and decision.

A Dynamic Decision Framework for an Integrated Manufacturing Enterprise

Author : Cecilia Temponi
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Dynamic Decision Making and the Perception of Risk for Low Probability Events a Literature Review

Author : Behnud Mir Djawadi
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The present study reviews the literature about dynamic decision-making and judgment of low-probability, high-consequence events. The specific features of this situation under risk and uncertainty imply an anomaly: while the single probability of an event with high negative consequences may be small, being exposed to the same situation repeatedly over time, however, makes the one-time occurrence of this event highly probable. Evidence is presented which demonstrates that people violate the principles of rationality in dynamic settings and make their decisions in isolation instead of integrating all future consequences. Moreover, systematic biases and errors in belief formation lead to judgments which do not coincide with those obtained by probability theory and Bayesian updating. The fundamental proposition of this literature review is that policy-makers can benefit from an integrated view of psychological factors and economic (non-)rational choice behavior. A profound understanding of how people think and make decisions concerning repeated risks of low-probability events conceivably leads to effective policies and risk management strategies ... ; eng.

The Role of Mental Models in Dynamic Decision Making

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The complex and dynamic nature of various types of operations pose specific cognitive challenges on the decision-making process that the current training regiment of military commanders does not directly address. Therefore, DRDC Toronto is interested in researching training techniques to prepare Canadian Forces (CF) commanders and staff for decision-making in such complex and dynamic environments (12sk). This report provides a review of relevant DDM literature and mental models literature as it relates to DDM. DDM consists of (1) decision maker(s) (2) in a complex environment (3) attempting to accomplish one or more tasks. DDM is required in environments with high risk and complexity, and involves the performance of tasks requiring multiple steps, that are inherently time sensitive, interdependent, and which exert influence over the surrounding environment as well as being influenced by it. Dynamic decision-making has been explored from different perspectives, including systems theory, psychology, and control theory from the engineering domain. These perspectives put varying amounts of focus on different aspects of DDM. What is common to all of these approaches are the assumptions that whether forming models of complex systems or making intuitive decisions based on very little information, people tend to form some sort of mental model to undertake DDM. At a broad level, mental models can be described as personal mental representations of our world. Although there is no one agreed definition of mental models, they are generally recognized to serve three key functions: to describe, to predict, and to explain our world. The aim of this report was to explore how mental models are understood across the propositional logic, physical systems, situation model, and system dynamics perspectives. Few similarities in the descriptions of mental models were found between the domains reviewed in this report.

Decision Theory

Author : John Bather
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Decision Theory An Introduction to Dynamic Programming and Sequential Decisions John Bather University of Sussex, UK Mathematical induction, and its use in solving optimization problems, is a topic of great interest with many applications. It enables us to study multistage decision problems by proceeding backwards in time, using a method called dynamic programming. All the techniques needed to solve the various problems are explained, and the author's fluent style will leave the reader with an avid interest in the subject. * Tailored to the needs of students of optimization and decision theory * Written in a lucid style with numerous examples and applications * Coverage of deterministic models: maximizing utilities, directed networks, shortest paths, critical path analysis, scheduling and convexity * Coverage of stochastic models: stochastic dynamic programming, optimal stopping problems and other special topics * Coverage of advanced topics: Markov decision processes, minimizing expected costs, policy improvements and problems with unknown statistical parameters * Contains exercises at the end of each chapter, with hints in an appendix Aimed primarily at students of mathematics and statistics, the lucid text will also appeal to engineering and science students and those working in the areas of optimization and operations research.

Sustainable Asset Accumulation and Dynamic Portfolio Decisions

Author : Carl Chiarella
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This book examines sustainable wealth formation and dynamic decision-making. The global economy experienced a veritable meltdown of asset markets in the years 2007-9, where many funds were overexposed to risky returns and suffered considerable losses. On the other hand, the long-term upswing in the stock market since 2010 has led to asset price booms and some new, but also uneven, wealth formation. In this book a broader set of constraints and guidelines for asset management and wealth accumulation is developed. The authors investigate how wealth formation and the proper management of financial funds can help to adequately buffer income risk and obtain sufficient risk-free income at a later stage of life, while also being socially and environmentally sustainable. The book explores behavioral and institutional rules for decision-making that reflect such constraints and guidelines, without necessarily being optimal in the narrow sense. The authors explain the need for such a dynamic decision-making and dynamic re-balancing of portfolios, by putting forward dynamic programming as an approach to dynamic decision-making that can allow sustainable wealth accumulation and dynamic asset allocation to be successfully integrated. This book provides a clear and comprehensive treatment of asset accumulation and dynamic portfolio models with an emphasis on long term and sustainable wealth formation. An important concern in public debate is the sustainability of our economy and this book employs cutting edge quantitative techniques and models to highlight important facts that cannot be disputed under any reasonable assumptions. It has the potential to become a standard reference for both academic researchers and quantitatively trained practitioners. Eckhard Platen, Professor of Quantitative Finance, University of Technology Sydney, Australia This book should be read by both academics and practitioners alike. The former will find intellectually rigorous discussions and innovative solutions. The latter may find a few of the concepts a bit challenging. Yet, theory and technology are there to help simplify the work of those who worry about what time it is rather than how to make a watch--- but they do need a watch. Jean Brunel, Founder of Brunel Associates and Editor of The Journal of Wealth Management

Decision Theory

Author : Bather
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