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This paper illustrates the usefulness of game theory for strategic management through theoretical and empirical analysis of price competition in the presence of production backlogs. Game-theoretic analysis predicts a different relationship between relative prices and backlog levels than does analysis that ignores the sorts of interactive considerations emphasized by game theory. Empirical analysis based on data for the U.S. market for large turbine generators between 1951 and 1963 corroborates the game-theoretic prediction. The paper concludes with a discussion of the sorts of situations in which game-theoretic reasoning is particularly likely to prove useful. [ABSTRACT FROM AUTHOR]

This article presents a reprint of the article "Behavioral decision theory: Processes of judgment and choice," by Hillel J. Einhorn and Robin M. Hogarth, which appeared in the "Annual Review of Psychology." The article provides an overview of several behavioral research papers to complement the behavioral decision theory study of Einhorn and Hogarth. The article explains the several ways to evaluate the discrepancies between the outputs of optimal models and human responses. Studies on the importance to behavior of the cognitive representation of the task are provided. By the examining the behavioral decision theory within a broad psychological context, the article emphasizes the importance of attention, memory, cognitive representation, conflict, learning and feedback.

Numerical decision analysis (NDA), derived from statistical decision theory, is very well known. Verbal decision analysis (VDA), oriented towards so-called unstructured problems, where the qualitative and uncertain factors dominate, is a newer direction in decision theory and practice. Verbal and numerical decision analyses (DAs) have been compared in an experimental setting, with groups of students. This paper presents the results of a comparison in the context of live practical tasks. Both approaches were attempted on two comparable choices, facing both Russian and US government agencies, involving a choice between oil and gas transportation options. The resulting methodological insights are generalized into a systematic comparison of the strong and weak features of each approach. [ABSTRACT FROM AUTHOR]

This paper describes the use of multiattribute decision making by the U.S. Coast Guard when choosing the most appropriate auxiliary device to use on an icebreaker. Five different missions of icebreakers are defined, and the objectives and attributes that describe the effectiveness of each auxiliary device in accomplishing these missions are established. For each geographical area of interest, the missions are weighted using the analytical hierarchy process. Also, group utilities are developed for attribute vectors in order to incorporate the judgments of different icebreaker operators. [ABSTRACT FROM AUTHOR]

This paper describes a method for systematically including consideration of noneconomic criteria in the decision-making process. It focuses on the Space Applications Program of the National Aeronautics and Space Administration, but is intended as a general outline applicable to decision problems in both government and business. The methodology involves four stages. First, a Criteria Set is developed by a panel of members with diverse backgrounds. Second, the criteria are made operational by posing a series of carefully worded questions to appropriate experts. Then the responses are scaled according to the degree of refinement considered necessary and appropriate. To allow flexibility and to accommodate differences in the degree of precision considered feasible, a number of sealing methods are identified. These range from a simple positive-negative response checkoff to summation of individually-weighted criteria with interaction among criteria. Finally, projects are selected on the basis of predetermined standards of choice. [ABSTRACT FROM AUTHOR]

This article reports on a study which addresses subjects' perception of the effect on information value of the degree of uncertainty in the prior state probability distribution in a particular decision setting. The authors use an experimental setting which separates the processes of decision making and information evaluation. They discuss briefly the concept of degree of uncertainty and its functional relationship with information value. An evaluation of the differences in the results of this study from previous research is presented. The authors conclude that information accuracy is an information system characteristic, whereas initial uncertainty is an "extrasystem" determinant.

This article studies the stewardship demand for information, its relationship to decision-making demand and implications for the theory of financial reporting. The author briefly reviews the literature on stewardship demand for financial reporting. The main objective is to identify issues which may benefit from formal analysis. Then, the author presents a generalized agency model and the stewardship demand for information is discussed within the framework of this model. A decision which is to be made after information is received is discussed.

This article presents the authors' comment on several implications of Hillel J. Einhorn and Robin M. Hogarth's study of accounting research. There are three issues in the study addressed by the authors. These are the general issues of the "reasonableness" of normative models of decision making, the issue of the reasonableness of expected utility theory as a descriptive model of choice and how individuals tend to frame and make decisions. The authors explain why choice theory is important to the practice of accounting, as well as to the production of accounting research. The authors conclude that the comparative advantage of accounting researchers is in the study of institutional dimensions.

This article discusses a descriptive study relevant to one component of the information evaluation model, the evaluator's probability distribution over actions the decision maker might choose. The author conducts an experiment to determine the ability of information evaluators to acquire knowledge about a decision maker's model and to apply the acquired knowledge to the evaluator's own decision making. The author discusses two paradigms, the information evaluation and lens models, that provide conceptual and methodological foundations for the study. He also describes the experimental task, subjects, and hypotheses. The results suggest that under certain conditions information evaluators may be able to acquire knowledge about a decision maker's model and apply that knowledge consistently to their own decision making. Several implications for information evaluation and issues for further research are discussed.

This article discusses findings of a study designed to examine an information evaluator's (IE) perceptions of accuracy as a determinant of information value. The authors provide an overview of previous studies concerning the issue. A study methodology is described. The study showed that subjects who received feedback did not on average perceive the effect of accuracy on information value significantly differently than those who did not receive feedback. Also, the non-risk-neutral subjects did not on average perceive the effect of accuracy on information value differently from risk-neutral subjects. The authors conclude that the proportion of information value functions which were nonmonotonic in accuracy was significantly greater in the feedback group than in the nonfeedback group.

Abstract: The predominant definition of extinction risk in conservation biology involves evaluating the cumulative distribution function (CDF) of extinction time at a particular point (the “time horizon”). Using the principles of decision theory, this article develops an alternative definition of extinction risk as the expected loss (EL) to society resulting from eventual extinction of a species. Distinct roles are identified for time preference and risk aversion. Ranges of tentative values for the parameters of the two approaches are proposed, and the performances of the two approaches are compared and contrasted for a small set of real‐world species with published extinction time distributions and a large set of hypothetical extinction time distributions. Potential issues with each approach are evaluated, and the EL approach is recommended as the better of the two. The CDF approach suffers from the fact that extinctions that occur at any time before the specified time horizon are weighted equally, while extinctions that occur beyond the specified time horizon receive no weight at all. It also suffers from the fact that the time horizon does not correspond to any natural phenomenon, and so is impossible to specify nonarbitrarily; yet the results can depend critically on the specified value. In contrast, the EL approach has the advantage of weighting extinction time continuously, with no artificial time horizon, and the parameters of the approach (the rates of time preference and risk aversion) do correspond to natural phenomena, and so can be specified nonarbitrarily. [ABSTRACT FROM AUTHOR]

This article considers the post-September 11 challenges faced by the U.S. national security machinery and analyzes the relationship between the new threat environment, the United States's role in the world, and decision-making structure. Homeland security is defined as a subset of national security. The threat of foreign terrorist organizations acting on U.S. soil should be seen in the political context of the pursuit of U.S. national interests in an often anarchic world. Two models for homeland security organizational structures are considered: a departmental model and an interagency model. The interagency model, embodied in the Homeland Security Council, is a better fit given the nature of the threat, the crucial need for coordination, and the realities of governmental decision making. The organizational challenges that may complicate the government's preparations, decisions, and implementation of a major homeland defense mission stem from three rivalries: executive-legislative, cabinet-staff, and Homeland Security Council-National Security Council. [ABSTRACT FROM AUTHOR]

Eight prescriptions for performance appraisal systems are considered in the context of case law at the Federal Supreme and Appeals Court level. Numerous cases are cited involving organizations that have violated one or more of the prescriptions. Implications for personnel decision making are discussed. [ABSTRACT FROM AUTHOR]

Decision-makers in organizations use dimensions implicitly or explicitly to sort strategic issues. This article compares the dimensions implied by three literatures and dimensions generated by an empirical study. While some similarities are identified, there are striking differences between what the literature assumes and what dimensions decision-makers in the NY/NJ Port Authority use to sort issues. Implications for theories of decision-making and interpretation in organizations are discussed. [ABSTRACT FROM AUTHOR]

The article examines the actions taken by a large US chemical company, using the pseudonym Chemco, in the wake of the Union Carbide chemical disaster in Bhopal, India. This field study focuses on the decisions faced by executives in the handling and production of toxic chemicals, as well as the potential hazards and safety precautions involved, taking into account a low probability occurrence that could have catastrophic consequences. The authors are interested in analyzing the firms behavior using a conceptual framework based in organizational behavior and decision theory.

The Financial Accounting Standards Board (FASB) follows an elaborate dueprocess procedure when it sets accounting standards. Little is known regarding what role submissions before the FASB play in the FASB's decision making process. This study examines one set of FASB decisions, changes between its 1974 and 1978 Exposure Drafts on price-level accounting, and relates it to firm-specific characteristics suggested by economic theory. The results suggest that corporations do influence FASB decision making, and large corporations with many lines of business are more successful in influencing the FASB. [ABSTRACT FROM AUTHOR]

Reports on the practical utilization of legal literature by lawyers in the U.S. Overview of a related address given by New Zealand lawyer John W. Salmond before the Association of the Bar of the City of New York in 1922; Solutions to the retrieval problem in U.S. law libraries; Connection between Decision Calculus and the retrieval problem; Comparison between the sensing organs of machines and humans.