...A Decision of Uncertainty A Decision of Uncertainty Paper There are decisions that people make where the outcome is presumably known and, there are the decisions that people make where the results are unknown. The latter part of the aforementioned statement is also known as decisions of uncertainty. To make these choices with more confidence, we will explore concepts that will formulate these judgments. We also have to include appropriate probability concepts that will help limit uncertainty in certain decisions. This paper will disclose the decision to reside in the tri-state area with the probability of destructive hurricanes occurring. Next this paper will reveal concepts and the outcome from the statistical analysis that was used to determine the final decision and, the tradeoffs between accuracy and precision required by various probability concepts. As a final point, this paper will demonstrate the effects the decision had on the data provided and the decision that was ultimately made. Probability Concepts and Application Hurricane Sandy hit Atlantic City, New Jersey on October 29, 2012. A 900-mile wide storm, Sandy affected the entire northeastern United States with devastating winds, rain and floods. New Jersey and New York suffered the worst from the super storm leaving thousands of people without power for days. People living in this area were not prepared or expected the storm to devastate the area as it did leaving homes and personal...
Words: 962 - Pages: 4
... | |In an information orientated system of financial reporting the move from historical cost to fair value | |accounting has created numerous debates surrounding the trade-offs of the concepts of relevance and | |reliability. This article contributes to the debate by critically reviewing the current developments of | |these trade-offs to determine whether current financial reporting guidelines are appropriate to deal with | |the difficulties and uncertainties of financial reporting. The article found that the proposals of the joint| |framework discussion paper goes a long way in resolving the issues around the trade-offs of relevance and | |reliability. Changing the concept of reliability to faithful representation will not negatively impact on | |resolving the issues. Some recommendations are made to enhance the trade-off concepts. | Keywords: Faithful representation Financial reporting Framework Discussion Paper Qualitative characteristics Relevance Reliability 1. Introduction The current international move from historical cost to fair value accounting has...
Words: 6702 - Pages: 27
...Abstract This paper begins with a concise introduction on the rational approach. From there the paper moves into defining the rational approach as it relates to decision-making. Next, the paper makes mention of Benjamin Franklin utilizing “pros” and “cons” in his decision making process”. Following this, there is a quick mention on uncertainty as it relates to financial risk as well as a brief mention of a step-based rational decision-making approach. After the definition section there is an application section which deals largely with uncertainty as well as intuition of a decision maker. It is argued that the rational approach fails to address certain aspects of uncertainty but does allow for improved decision making as a whole. Finally, the paper concludes concisely noting that the rational approach is not fully achievable in the context of the real world as it is intended for an ideal state bounded by rational criterion. Rational Approach The rational approach to individual decision-making allows for managers to operate in the context of an ideal systematic method. Decision-making, particularly in the context of an organization, can be difficult with significant complexity and multi-faceted dimensions. Operating outside of a specific framework can increase the difficulty for managers to make the best possible rational solution resulting in arbitrary and sometimes non-optimal decisions. The rational approach allows for greater optimization and normalization in decision-making...
Words: 1529 - Pages: 7
...July 1999 Abstract The Project Management Institute's Guide to the Project Management Body of Knowledge (PMBOK) underpins many initiatives to improve project management practice. It is widely used for training and underpins the development of competency standards. Because of its fundamental importance, the PMBOK should be critically reviewed. This paper agues for an expansion of the PMBOK Guide's risk management knowledge area to include a wider perspective of incomplete knowledge. The PMBOK Guide deals with uncertainty through the traditional use of probability theory, however the underpinning assumptions of probability theory do not always apply in practice. Furthermore, probability-based risk management theory does not explain important aspects of observed project management practice. This paper discusses an expanded framework of incomplete knowledge, including: an expanded concept of uncertainty that acknowledges ignorance or surprise, where there is no prior knowledge of future states; imprecision arising from ambiguity (fuzziness) in project parameters and future states; and, human limitations in information processing. The paper shows the expanded framework explains observed project-management practice more thoroughly than the probability-based framework. The conclusion reached is that ``management of incomplete knowledge'' provides a better theoretical foundation for improving project management practice. To substantiate this, a promising new approach based on ``real options''...
Words: 5801 - Pages: 24
...Modeling Culture in Trade: Uncertainty Avoidance* Gert Jan Hofstede Wageningen University gertjan.hofstede@wur.nl Catholijn M. Jonker Delft University of Technology c.m.jonker@tudelft.nl Tim Verwaart LEI Wageningen UR tim.verwaart@wur.nl Keywords: trade, culture, agents, uncertainty avoidance, negotiation Abstract A model is presented of the way that our cultural attitude towards the unknown influences the decisions we make in trade. Uncertainty avoidance is one of Hofstede’s five cultural dimensions. The paper presents a model of how this dimension affects trade. This influence has been explicated for the decisions regarding trade: partner selection, negotiation behavior, trust, and the interpretation of the trade partner’s behavior. It has been verified in simulations showing that the generic tendencies as attributed to uncertainty avoidance are reflected in the simulation results. Our approach is an example of instantiating generic knowledge on the influences of culture on decision-making in general. INTRODUCTION The international food economy is rapidly changing. Important issues are concentration and globalization, growing information intensity, consumer demands, and social responsibility [Kinsey 2001]. An important issue in current food trade research is the emergence and performance of international supply chain networks [Lazzarini et al. 2001]. Agent-based modeling extends the understanding of processes in society and economy. It enables simulation of the emergence...
Words: 6864 - Pages: 28
...A Design of Energy Detector in Cognitive Radio under Noise Uncertainty Wei Lin, and Qinyu Zhang Communication Engineering Research Center, Shenzhen Graduate School, Harbin Institute of Technology Email: {hitblueghost@hotmail.com, zqy@hit.edu.cn} CR system being taken into practical use is on the premise that CR system will not cause unbearable interference to primary systems. Designers of CR system need to make a fundamental tradeoff between space and transmission power [3]. In “no-talk” zone around the protected primary receiver, cognitive users must keep silent to allow the primary receiver to decode the received signal correctly. Since the quiet zone is outside the decodable region, cognitive devices are required to have high sensitivity in order to detect the primary signal in low SNR. Device-centric sensing methods mainly used in CR include energy detection, coherent detection, and cyclostationary feature detection [4]. The energy detector (radiometer) can detect any type of unknown primary signal. The coherent detector (matched filter) is the optimal detector for deterministic signal on Additive White Gaussian Noise (AWGN) channel, which can be used to detect the primary signals with a pilot. And the cyclostationary feature detector is suitable for the detection of non-white signal, such as the OFDM signal of DTV system [5]. Compared with other detectors, the performance of energy detector is lower. However, energy detector is most widely used because it doesn’t need any...
Words: 1214 - Pages: 5
...Frankfurt School of Finance & Management Intercultural Management Uncertainty Avoidance By Arina Hadlich Alok Mani Tripathi Program: Master of International Business June, 2013 Contents Essence of Uncertainty Avoidance 3 Uncertainty Avoidance Index 3 Uncertainty Avoidance and Anxiety 4 Uncertainty Avoidance According to Occupation, Gender and Age 5 Uncertainty Avoidance in the Family 5 Uncertainty Avoidance Health and (Un)happiness 6 Uncertainty Avoidance at School 6 Uncertainty Avoidance in Shopping 6 Sources 7 Introduction We live in the age of rapid globalization. New technology has shrunk the size of the world. The world has become a small state with a few big cities, few towns and villages. The cities are markets for the products form towns and villages, and vice versa. This shrinking in size has brought people from different cultures and backgrounds to work together under the same umbrella. Wherever you go, even the smallest of the company has people from different cultural backgrounds. This mixing of so many cultures at workplace has come up to be challenge for the modern organizations. The modern managers or leaders find it difficult to make a decision for their team, which comprises of people from different cultural and educational backgrounds. There is always a problem of synchronization within the team, which is faced by a modern leader. Since different statements are perceived differently in different cultures, the problem of miscommunication...
Words: 3986 - Pages: 16
...Decisions Based on Analysis of Alternatives (AoA) Dr. David G. Ullman 1 , January 2009 Analysis of Alternatives (AoA) is a term that has been adopted by the Office of Management and Budget (OMB) and the Department of Defense (DoD) to ensure that multiple alternatives have been analyzed prior to making costly investment decisions. AoA is an effort to move from the justification for a single alternative to the exploration of multiple alternatives so agencies have a basis for funding the best possible projects in a rational, defensible manner considering risk and uncertainty. As with other decisionmaking tools, techniques, and methodologies, AoA is most effectively used in a higherlevel decision-making context, such as an Enterprise Architecture (EA) framework. In fact, it is doubtful that the higher levels of AoA maturity (see below) could even be considered outside of a higher-level context. What Is AoA? And Why Do It? Analysis of Alternatives is the analytical comparison of multiple alternatives to be completed before committing resources to one project. The practice of comparing multiple alternative solutions has long been a part of engineering practice (Ullman, 2009, especially Chapter 7, Concept Generation). There is, however, a natural human tendency to propose a single alternative for funding or development and justify this option rather than compare multiple options with the goal of choosing the best one. Justification is easier to do than evaluating multiple options and...
Words: 3583 - Pages: 15
.......................................... 2 Some evidence in the modern capitalism interpretation: ................................................................. 2 elements of a general theory of employment and potential instability under capitalism: ................. 3 ð A “monetary economy” and the search for pecuniary gains: ................................................... 3 ð Determination of employment in the short period: ................................................................. 3 ð The rudiments of a theory of expenditure and critique of Say’s law: ....................................... 4 ð A more detailed theory of expenditure: .................................................................................. 4 ð Uncertainty, expectation and confidence: ............................................................................... 4 ð Investment, asset choice and liquidity preference: ................................................................... 4 ð Employment and the essential properties of money: ............................................................... 4 ð Potential instability: ................................................................................................................ 5 ð Investments, saving and banking system:................................................................................. 5 conclusion: ......................................................................................................................
Words: 2005 - Pages: 9
...Management Control of Project Portfolio Uncertainty: A Managerial Role Perspective Tuomas Korhonen, Cost Management Center (CMC), Department of Industrial Management, Tampere University of Technology, Tampere, Finland Teemu Laine, Cost Management Center (CMC), Department of Industrial Management, Tampere University of Technology, Tampere, Finland Miia Martinsuo, Department of Industrial Management, Tampere University of Technology, Tampere, Finland PAPERS ABSTRACT ■ This article presents empirical results on different managers’ viewpoints regarding the sources and management of project portfolio uncertainty. As a key result, this study demonstrates the versatility of uncertainties experienced by managers, the limited degree of perceived control over them, the use of an almost complete management control package in managing uncertainties, and the necessity of managers’ cooperation in the skilled use of the management control package when managing uncertainties. In addition, a further research agenda is proposed. KEYWORDS: project portfolio management; uncertainty; managerial roles; management control systems; product development INTRODUCTION ■ n their product development, large companies have adopted project portfolio management (PPM) as a means for prioritizing and selecting product development projects among various options as well as allocating resources with the value maximization, balance, and strategic alignment of the portfolio in mind (Cooper, Edgett, & Kleinschmidt...
Words: 11185 - Pages: 45
...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory Join Search Browse Saved Papers Home Page » Business and Management Business of Baseball In: Business and Management Business of Baseball Mgt. 110 Business of Baseball Jordan Core 1. Baseball is full of decisions; every single last pitch is a decision, whether to pitch it high, low, inside, outside. The coach must make the decision of which players to play on certain nights and whether or not to take a pitcher out of the game. I think baseball has the most decisions to be made out of all the “big four” sports. Most decisions in baseball are structured problems, they are easily definable. If a slugger keeps hitting the fastball, it’s time to make the decision of pitching him curveballs away from his hotspot in the strike zone. There is a standardized way of handling almost every type of player and situation. Granted, there may be certain decisions that are unstructured problems and are not faced everyday by the manager such as a star player going down with an injury. The manager must make the decision of how to fill the void left by the injury. If you believe in it, luck can be an unstructured problem as well. In baseball all decision makers are faced with either risk or uncertainty. I don’t believe there is any certainty in any sport. Even the best pitchers have games where they falter so nothing is to be expected. To be the best...
Words: 392 - Pages: 2
...This paper provides a theory on the effect of financial structure of the firm on market valuations. In other words, does capital structure influence value of the firm? I believe the introduction of the paper gives an important explanation of how Modigliani has reached his theorem, because his main goal was to correct the drawbacks of other theories. To understand the importance of such a theory, I considered adding these other theories as an introduction of this summary. The cost of capital to the owners of a firm is simply the rate of interest in bonds; this has derived the proposition that the firm, acting rationally, will tend to push investment to the point where the marginal yield on physical assets is equal to the market rate of interest. This proposition follows from either of two criteria of rational decision-making: (1) the maximization of profits, and (2) the maximization of market value. Under either formulation, the cost of capital is equal to the rate of interest on bonds. These have equivalent implications under certainty (Certainty Equivalent Approach) but not under uncertainty. The attempt of allowing uncertainty takes the form of superimposing on the results of the certainty analysis the notion of a risk discount to be subtracted from the expected yield. No satisfactory explanation has yet been provided as to what determines the size of the risk discount and how it varies in response to changes in other variables. The profit maximization criterion, under the...
Words: 921 - Pages: 4
...certify that I am the author of this paper and that any assistance I received in its preparation is full acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I have added quotes whenever I used more than three consecutive words from another writer. I also certify that this paper was prepared by me specifically for this course. Student’s Signature: Khanya Clark-Robinson Khanya Clark-Robinson Final Paper Kahneman1, Daniel and Tversky, Amos. (1979). “Prospect Theory: An Analysis of Decision under Risk.” 1. Big Question The big question of this article is how people make decisions under uncertainty of risks and rewards. Decisions under risks assume that a decision can be quantified as a positive or negative outcome with quantifiable probability. This theory was developed for monetary decisions and the process observations can be included in other fields; fields such as social sciences and policy making. 2. Background Information The standard for analyzing decisions was the theory that quantified the outcome and probability. A reasonable individual will choose the option with the best utility. The probability results should all add up to 100%. The utility theory has a defined logical foundation and it represents a behavior with uncertainty and a variety of decisions. At this time it is the approved method that evaluated decisions in science. Although it is utilized...
Words: 1080 - Pages: 5
...American College of Commerce and Technology Revised: April 6, 2016 Course Syllabus |I. General Information | |Course Number & Title: |CIS557 - Decision Making Under Uncertainly | | |4062 | |Section: | | | |4.5 Quarter Hours Credit | | |CIS: Lecture 40 hours, Laboratory 10 hours | | |Wednesday 4:00 -8:10 PM | | |Spring Quarter, 2016 | |Instructor: |Nazar Younis, Ph.D. | |Instructor Email Address: |Nazar.younis@acct.edu | | ...
Words: 1880 - Pages: 8
... Warada Bhagwat (08) Sayali Bhanage (10) Saona Bhattacharya (12) Shobhit Mishra (36) Introduction In decision theory and economics, ambiguity aversion (also known as uncertainty aversion) describes a preference for known risks over unknown risks. An ambiguity averse individual would rather choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown. This behavior was first introduced through the Ellsberg paradox (people prefer to bet on the outcome of an urn with 50 red and 50 blue balls to on one with 100 total balls but for which the number of blue or red balls is unknown). There are a number of choices involving uncertainty and normally they can be classified in two categories: risky and ambiguous events. Risky events have a certain probability distribution over outcome while ambiguous events have some uncertainty over said probability distribution. The reaction is behavioral and still being formalized. Ambiguity aversion can be used to explain incomplete contracts, volatility in stock markets, and selective abstention in elections (Ghirardato & Marinacci, 2001) The distinction between ambiguity aversion and risk aversion is important but subtle. Risk aversion...
Words: 2024 - Pages: 9
