Irreversible Decisions under Uncertainty PDF Download

Author: Svetlana Boyarchenko
Publisher: Springer Science & Business Media
ISBN: 3540737464
Category : Business & Economics
Languages : en
Pages : 292

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Book Description
Here, two highly experienced authors present an alternative approach to optimal stopping problems. The basic ideas and techniques of the approach can be explained much simpler than the standard methods in the literature on optimal stopping problems. The monograph will teach the reader to apply the technique to many problems in economics and finance, including new ones. From the technical point of view, the method can be characterized as option pricing via the Wiener-Hopf factorization.

Author: Shane Parrish
Publisher: Penguin
ISBN: 0593719972
Category : Business & Economics
Languages : en
Pages : 209

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Book Description
Discover the essential thinking tools you’ve been missing with The Great Mental Models series by Shane Parrish, New York Times bestselling author and the mind behind the acclaimed Farnam Street blog and “The Knowledge Project” podcast. This first book in the series is your guide to learning the crucial thinking tools nobody ever taught you. Time and time again, great thinkers such as Charlie Munger and Warren Buffett have credited their success to mental models–representations of how something works that can scale onto other fields. Mastering a small number of mental models enables you to rapidly grasp new information, identify patterns others miss, and avoid the common mistakes that hold people back. The Great Mental Models: Volume 1, General Thinking Concepts shows you how making a few tiny changes in the way you think can deliver big results. Drawing on examples from history, business, art, and science, this book details nine of the most versatile, all-purpose mental models you can use right away to improve your decision making and productivity. This book will teach you how to: Avoid blind spots when looking at problems. Find non-obvious solutions. Anticipate and achieve desired outcomes. Play to your strengths, avoid your weaknesses, … and more. The Great Mental Models series demystifies once elusive concepts and illuminates rich knowledge that traditional education overlooks. This series is the most comprehensive and accessible guide on using mental models to better understand our world, solve problems, and gain an advantage.

Author: Robert K. Dixit
Publisher: Princeton University Press
ISBN: 1400830176
Category : Business & Economics
Languages : en
Pages : 484

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Book Description
How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.

Author: Vincent A. W. J. Marchau
Publisher: Springer
ISBN: 3030052524
Category : Business & Economics
Languages : en
Pages : 408

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Book Description
This open access book focuses on both the theory and practice associated with the tools and approaches for decisionmaking in the face of deep uncertainty. It explores approaches and tools supporting the design of strategic plans under deep uncertainty, and their testing in the real world, including barriers and enablers for their use in practice. The book broadens traditional approaches and tools to include the analysis of actors and networks related to the problem at hand. It also shows how lessons learned in the application process can be used to improve the approaches and tools used in the design process. The book offers guidance in identifying and applying appropriate approaches and tools to design plans, as well as advice on implementing these plans in the real world. For decisionmakers and practitioners, the book includes realistic examples and practical guidelines that should help them understand what decisionmaking under deep uncertainty is and how it may be of assistance to them. Decision Making under Deep Uncertainty: From Theory to Practice is divided into four parts. Part I presents five approaches for designing strategic plans under deep uncertainty: Robust Decision Making, Dynamic Adaptive Planning, Dynamic Adaptive Policy Pathways, Info-Gap Decision Theory, and Engineering Options Analysis. Each approach is worked out in terms of its theoretical foundations, methodological steps to follow when using the approach, latest methodological insights, and challenges for improvement. In Part II, applications of each of these approaches are presented. Based on recent case studies, the practical implications of applying each approach are discussed in depth. Part III focuses on using the approaches and tools in real-world contexts, based on insights from real-world cases. Part IV contains conclusions and a synthesis of the lessons that can be drawn for designing, applying, and implementing strategic plans under deep uncertainty, as well as recommendations for future work. The publication of this book has been funded by the Radboud University, the RAND Corporation, Delft University of Technology, and Deltares.

Author: Institute of Medicine
Publisher: National Academies Press
ISBN: 0309290236
Category : Political Science
Languages : en
Pages : 280

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Book Description
The U.S. Environmental Protection Agency (EPA) is one of several federal agencies responsible for protecting Americans against significant risks to human health and the environment. As part of that mission, EPA estimates the nature, magnitude, and likelihood of risks to human health and the environment; identifies the potential regulatory actions that will mitigate those risks and protect public health1 and the environment; and uses that information to decide on appropriate regulatory action. Uncertainties, both qualitative and quantitative, in the data and analyses on which these decisions are based enter into the process at each step. As a result, the informed identification and use of the uncertainties inherent in the process is an essential feature of environmental decision making. EPA requested that the Institute of Medicine (IOM) convene a committee to provide guidance to its decision makers and their partners in states and localities on approaches to managing risk in different contexts when uncertainty is present. It also sought guidance on how information on uncertainty should be presented to help risk managers make sound decisions and to increase transparency in its communications with the public about those decisions. Given that its charge is not limited to human health risk assessment and includes broad questions about managing risks and decision making, in this report the committee examines the analysis of uncertainty in those other areas in addition to human health risks. Environmental Decisions in the Face of Uncertainty explains the statement of task and summarizes the findings of the committee.

Author: Robert S. Pindyck
Publisher: World Bank Publications
ISBN:
Category : Capital investments
Languages : en
Pages : 58

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Book Description
Irreversible investment is especially sensitive to such risk factors as volatile exchange rates and uncertainty about tariff structures and future cash flows. If the goal of macroeconomic policy is to stimulate investment, stability and credibility may be more important than tax incentives or interest rates.

Author: Darrell Rigby
Publisher: Harvard Business Press
ISBN: 1633698718
Category : Business & Economics
Languages : en
Pages : 151

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Book Description
Agile has the power to transform work--but only if it's implemented the right way. For decades business leaders have been painfully aware of a huge chasm: They aspire to create nimble, flexible enterprises. But their day-to-day reality is silos, sluggish processes, and stalled innovation. Today, agile is hailed as the essential bridge across this chasm, with the potential to transform a company and catapult it to the head of the pack. Not so fast. In this clear-eyed, indispensable book, Bain & Company thought leader Darrell Rigby and his colleagues Sarah Elk and Steve Berez provide a much-needed reality check. They dispel the myths and misconceptions that have accompanied agile's rise to prominence--the idea that it can reshape an organization all at once, for instance, or that it should be used in every function and for all types of work. They illustrate that agile teams can indeed be powerful, making people's jobs more rewarding and turbocharging innovation, but such results are possible only if the method is fully understood and implemented the right way. The key, they argue, is balance. Every organization must optimize and tightly control some of its operations, and at the same time innovate. Agile, done well, enables vigorous innovation without sacrificing the efficiency and reliability essential to traditional operations. The authors break down how agile really works, show what not to do, and explain the crucial importance of scaling agile properly in order to reap its full benefit. They then lay out a road map for leading the transition to a truly agile enterprise. Agile isn't a goal in itself; it's a means to becoming a high-performance operation. Doing Agile Right is a must-have guide for any company trying to make the transition--or trying to sustain high agility.

Author: Itzhak Gilboa
Publisher: Cambridge University Press
ISBN: 052151732X
Category : Business & Economics
Languages : en
Pages : 216

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Book Description
This book describes the classical axiomatic theories of decision under uncertainty, as well as critiques thereof and alternative theories. It focuses on the meaning of probability, discussing some definitions and surveying their scope of applicability. The behavioral definition of subjective probability serves as a way to present the classical theories, culminating in Savage's theorem. The limitations of this result as a definition of probability lead to two directions - first, similar behavioral definitions of more general theories, such as non-additive probabilities and multiple priors, and second, cognitive derivations based on case-based techniques.

Author: Alexander Golub
Publisher: Routledge
ISBN: 1134041195
Category : Business & Economics
Languages : en
Pages : 433

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Book Description
The issues of technology and uncertainty are very much at the heart of the policy debate of how much to control greenhouse gas emissions. The costs of doing so are present and high while the benefits are very much in the future and, most importantly, they are highly uncertain. Whilst there is broad consensus on the key elements of climate change science and agreement that near-term actions are needed to prevent dangerous anthropogenic interference with the climate system, there is little agreement on the costs and benefits of climate policy. The book looks at different ways of reconciling the needs for sustainability and equity with the costs of action now. Presenting a compendium of methodologies for evaluating the economic impact of technological innovation upon climate-change policy, this book describes mathematical models and their predictions. The goal is to provide a practitioner’s guide for doing the science of economics and climate change. Because the assumptions motivating different problems in the economics of climate change have different complexities, a number of models are presented with varying levels of difficulty: reduced-form and structural, partial- and general-equilibrium, closed-form and computational. A unifying theme of these models is the incorporation of a number of price and quantity instruments and an analysis of their respective efficacies. This book presents models that contain structural uncertainty, i.e., uncertainty that economic agents respond to via their risk attitudes. The novelty of this book is to relate the effects of risk and risk attitudes to environment-improving technological innovation.

Author: John O.S. Kennedy
Publisher: Springer Science & Business Media
ISBN: 9400941919
Category : Science
Languages : en
Pages : 343

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Book Description
Humans interact with and are part of the mysterious processes of nature. Inevitably they have to discover how to manage the environment for their long-term survival and benefit. To do this successfully means learning something about the dynamics of natural processes, and then using the knowledge to work with the forces of nature for some desired outcome. These are intriguing and challenging tasks. This book describes a technique which has much to offer in attempting to achieve the latter task. A knowledge of dynamic programming is useful for anyone interested in the optimal management of agricultural and natural resources for two reasons. First, resource management problems are often problems of dynamic optimization. The dynamic programming approach offers insights into the economics of dynamic optimization which can be explained much more simply than can other approaches. Conditions for the optimal management of a resource can be derived using the logic of dynamic programming, taking as a starting point the usual economic definition of the value of a resource which is optimally managed through time. This is set out in Chapter I for a general resource problem with the minimum of mathematics. The results are related to the discrete maximum principle of control theory. In subsequent chapters dynamic programming arguments are used to derive optimality conditions for particular resources.