In recent years, the state of Colorado has experienced extreme wildfire events that have degraded forest and watershed health and devastated human communities. With expanding human development and a changing climate, wildfire activity is likely to increase, and wildfire management agencies will be challenged to sustain landscapes and the ecosystem services they provide. A critical element of the United States’ federal-, state-, and local-level multiagency wildfire response is the interagency dispatching system, which facilitates the ordering, mobilization, and tracking of firefighting resources to and from wildfire incidents—a role that is likely to increase in both importance and workload in the future. Given increasing demands, it is worth considering ways to improve efficiencies, capacity, and capability within the current Colorado dispatching system. With this, the Rocky Mountain Coordinating Group (RMCG) and the Rocky Mountain Area Fire Executive Council (RMA-FEC) sought to reorganize the dispatching system, beginning with exploration of changes to dispatching zone boundaries and the number and location of dispatching centers throughout the state. Here we describe a multiyear research–management partnership with the RMCG and RMA-FEC to apply a structured decision-making process to guide this reorganization effort. We highlight the steps used in a participatory process that involved local decision makers and included iteratively revising and clarifying the problem statement, developing objectives and translating them into measurable attributes, building a multiobjective optimization model to generate and compare alternatives, and communicating a recommended alternative that was ultimately adopted. To conclude, we discuss insights from our experience and highlight opportunities for similar work to support efficient wildfire management elsewhere in the United States. History: This paper has been accepted for the Decision Analysis Special Issue on Decision Analysis to Further Environmental Sustainability. Funding: This research was supported by the U.S. Department of Agriculture Forest Service.
{"title":"A Decision Framework for Evaluating the Rocky Mountain Area Wildfire Dispatching System in Colorado","authors":"Erin J. Belval, Matthew P. Thompson","doi":"10.1287/deca.2022.0047","DOIUrl":"https://doi.org/10.1287/deca.2022.0047","url":null,"abstract":"In recent years, the state of Colorado has experienced extreme wildfire events that have degraded forest and watershed health and devastated human communities. With expanding human development and a changing climate, wildfire activity is likely to increase, and wildfire management agencies will be challenged to sustain landscapes and the ecosystem services they provide. A critical element of the United States’ federal-, state-, and local-level multiagency wildfire response is the interagency dispatching system, which facilitates the ordering, mobilization, and tracking of firefighting resources to and from wildfire incidents—a role that is likely to increase in both importance and workload in the future. Given increasing demands, it is worth considering ways to improve efficiencies, capacity, and capability within the current Colorado dispatching system. With this, the Rocky Mountain Coordinating Group (RMCG) and the Rocky Mountain Area Fire Executive Council (RMA-FEC) sought to reorganize the dispatching system, beginning with exploration of changes to dispatching zone boundaries and the number and location of dispatching centers throughout the state. Here we describe a multiyear research–management partnership with the RMCG and RMA-FEC to apply a structured decision-making process to guide this reorganization effort. We highlight the steps used in a participatory process that involved local decision makers and included iteratively revising and clarifying the problem statement, developing objectives and translating them into measurable attributes, building a multiobjective optimization model to generate and compare alternatives, and communicating a recommended alternative that was ultimately adopted. To conclude, we discuss insights from our experience and highlight opportunities for similar work to support efficient wildfire management elsewhere in the United States. History: This paper has been accepted for the Decision Analysis Special Issue on Decision Analysis to Further Environmental Sustainability. Funding: This research was supported by the U.S. Department of Agriculture Forest Service.","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86856242","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent empirical studies point out that the firms do not fully incorporate the managers’ past performance when revising future contractual terms. This study offers a theoretical perspective on the firm’s executive compensation strategy that supports such latest empirical findings. Using a two-period principal-agent model, we examine firm’s compensation schemes with ratchet principle taking into account key factors such as informational rent, capability uncertainty, and performance noise. After characterizing the optimal incentive rates for a given degree of ratcheting, we examine the efficacy of ratcheting contract in executive compensation. We also explore the optimal degree of ratcheting that strikes a fine balance between informational rent and ratchet effect. We find that the capability gap-performance noise ratio plays a critical role in determining the optimal degree of ratcheting. Funding: I. Hwang and M. K. Lim acknowledge support from the Institute of Management Research at Seoul National University. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0467 .
最近的实证研究指出，企业在修改未来的合同条款时，并没有充分考虑到经理人过去的绩效。本研究为公司高管薪酬策略提供了一个理论视角，支持这些最新的实证研究结果。在考虑信息租金、能力不确定性和绩效噪声等关键因素的情况下，采用两期委托代理模型，运用棘轮原理对企业薪酬方案进行了研究。在刻画了给定棘轮程度下的最优激励率后，我们检验了棘轮契约在高管薪酬中的有效性。我们还探讨了在信息租金和棘轮效应之间取得良好平衡的最佳棘轮程度。研究发现，性能间隙-性能噪声比是决定棘轮优化程度的关键因素。资助:I. Hwang和M. K. Lim感谢首尔国立大学经营研究所的支持。补充材料:在线附录可在https://doi.org/10.1287/deca.2023.0467上获得。
{"title":"Optimal Ratcheting in Executive Compensation","authors":"Iny Hwang, Youngsoo Kim, Michael K. Lim","doi":"10.1287/deca.2023.0467","DOIUrl":"https://doi.org/10.1287/deca.2023.0467","url":null,"abstract":"Recent empirical studies point out that the firms do not fully incorporate the managers’ past performance when revising future contractual terms. This study offers a theoretical perspective on the firm’s executive compensation strategy that supports such latest empirical findings. Using a two-period principal-agent model, we examine firm’s compensation schemes with ratchet principle taking into account key factors such as informational rent, capability uncertainty, and performance noise. After characterizing the optimal incentive rates for a given degree of ratcheting, we examine the efficacy of ratcheting contract in executive compensation. We also explore the optimal degree of ratcheting that strikes a fine balance between informational rent and ratchet effect. We find that the capability gap-performance noise ratio plays a critical role in determining the optimal degree of ratcheting. Funding: I. Hwang and M. K. Lim acknowledge support from the Institute of Management Research at Seoul National University. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0467 .","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135325078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Adrienne L. Contasti, A. G. Firth, B. H. Baker, J. Brooks, M. Locke, D. Morin
There is a need to achieve sustainable agricultural production to secure food, fiber, and fuel for a growing global population. Climate-smart (CS) actions (no-till and cover crops) can reduce carbon emissions and promote soil organic carbon (SOC) storage. Contemporary voluntary carbon markets provide producers with a monetary incentive to adopt CS actions. However, SOC–yield dynamics under CS actions are not well known, making it difficult for producers to judge whether additional income from carbon credits will offset potential losses to yield income. We designed a SOC–yield framework that captures SOC–yield–income dynamics under traditional (reduced tillage, no cover crops) and CS actions. Using a modified structured decision-making approach, we applied the framework to a case study in which producers aim to increase income by selling carbon credits after adopting CS actions. Specifically, we demonstrated how to balance tradeoffs between yield and carbon credit income that arise from tillage and winter cover crop actions (cereal rye, Secale cereale L. and crimson clover, Trifolium incarnatum L.) in a soybean (Glycine max L.) production system in Mississippi. Results indicated that a producer could minimize losses to net yield income by adopting no-till if already using cover crops. There was also evidence that carbon credit income could offset losses to yield income when adopting CS in place of traditional actions. Identifying risks to yield income and SOC storage can help design carbon neutrality policies that have minimum impact on a producer’s income. History: This paper has been accepted for the Decision Analysis Special Issue on Further Environmental Sustainability. Funding: This work was supported by the USDA-ARS [Grants 58-0200-0-002 (Advancing Agricultural Research) and 58-6001-8-003] and the USDA National Institute of Food and Agriculture [McIntire Stennis Project 1020959]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0478 .
{"title":"Balancing Tradeoffs in Climate-Smart Agriculture: Will Selling Carbon Credits Offset Potential Losses in the Net Yield Income of Small-Scale Soybean (Glycine max L.) Producers in the Mid-Southern United States?","authors":"Adrienne L. Contasti, A. G. Firth, B. H. Baker, J. Brooks, M. Locke, D. Morin","doi":"10.1287/deca.2023.0478","DOIUrl":"https://doi.org/10.1287/deca.2023.0478","url":null,"abstract":"There is a need to achieve sustainable agricultural production to secure food, fiber, and fuel for a growing global population. Climate-smart (CS) actions (no-till and cover crops) can reduce carbon emissions and promote soil organic carbon (SOC) storage. Contemporary voluntary carbon markets provide producers with a monetary incentive to adopt CS actions. However, SOC–yield dynamics under CS actions are not well known, making it difficult for producers to judge whether additional income from carbon credits will offset potential losses to yield income. We designed a SOC–yield framework that captures SOC–yield–income dynamics under traditional (reduced tillage, no cover crops) and CS actions. Using a modified structured decision-making approach, we applied the framework to a case study in which producers aim to increase income by selling carbon credits after adopting CS actions. Specifically, we demonstrated how to balance tradeoffs between yield and carbon credit income that arise from tillage and winter cover crop actions (cereal rye, Secale cereale L. and crimson clover, Trifolium incarnatum L.) in a soybean (Glycine max L.) production system in Mississippi. Results indicated that a producer could minimize losses to net yield income by adopting no-till if already using cover crops. There was also evidence that carbon credit income could offset losses to yield income when adopting CS in place of traditional actions. Identifying risks to yield income and SOC storage can help design carbon neutrality policies that have minimum impact on a producer’s income. History: This paper has been accepted for the Decision Analysis Special Issue on Further Environmental Sustainability. Funding: This work was supported by the USDA-ARS [Grants 58-0200-0-002 (Advancing Agricultural Research) and 58-6001-8-003] and the USDA National Institute of Food and Agriculture [McIntire Stennis Project 1020959]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0478 .","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86052487","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From the Editor: Belated Recognition for the 2021 Clemen–Kleinmuntz Decision Analysis Best Paper Award Winner and Finalist","authors":"V. Bier","doi":"10.1287/deca.2023.0477","DOIUrl":"https://doi.org/10.1287/deca.2023.0477","url":null,"abstract":"","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88362694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From the Editor and Chair of the Award Committee: 2022 Clemen–Kleinmuntz Decision Analysis Best Paper Award","authors":"V. Bier, G. Montibeller","doi":"10.1287/deca.2023.0476","DOIUrl":"https://doi.org/10.1287/deca.2023.0476","url":null,"abstract":"","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85807033","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Noise traders are a central idea in the modern theory of asset markets, yet there is not a standard model of such agents in contrast to the well-established representation of rational agents as expected utility maximizers. We propose the Hurwicz criterion, a classical criterion in decision analysis for choice under uncertainty, as a foundation for noise traders in asset markets. Hurwicz agents trade on optimism and pessimism and do not trade on information. A binary asset market is introduced with asymmetric information and heterogeneity both in rationality and in ambiguity attitudes. In this environment, noise trader behavior is endogenously positively correlated, the market is more efficient in low sentiment periods, and the favorite-longshot bias holds in equilibrium. The analysis demonstrates that aggregate market properties such as positive trading volume and the favorite longshot bias can be derived from the micro behavior of individual agents that have an axiomatic foundation.
{"title":"A Decision Theoretic Foundation for Noise Traders and Correlated Speculation","authors":"Mark Schneider, M. Nunez","doi":"10.1287/deca.2023.0473","DOIUrl":"https://doi.org/10.1287/deca.2023.0473","url":null,"abstract":"Noise traders are a central idea in the modern theory of asset markets, yet there is not a standard model of such agents in contrast to the well-established representation of rational agents as expected utility maximizers. We propose the Hurwicz criterion, a classical criterion in decision analysis for choice under uncertainty, as a foundation for noise traders in asset markets. Hurwicz agents trade on optimism and pessimism and do not trade on information. A binary asset market is introduced with asymmetric information and heterogeneity both in rationality and in ambiguity attitudes. In this environment, noise trader behavior is endogenously positively correlated, the market is more efficient in low sentiment periods, and the favorite-longshot bias holds in equilibrium. The analysis demonstrates that aggregate market properties such as positive trading volume and the favorite longshot bias can be derived from the micro behavior of individual agents that have an axiomatic foundation.","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72740612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From the Editors: New Decision Analysis Journal Submission Requirements","authors":"V. Bier, S. French","doi":"10.1287/deca.2023.0475","DOIUrl":"https://doi.org/10.1287/deca.2023.0475","url":null,"abstract":"","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79874831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The value of information is a central concept in decision analysis, used to quantify how much the expected outcome of a decision would be improved if epistemic uncertainty could be resolved prior to committing to a course of action. One of the challenges, however, in quantitative analysis of the value of information is that the calculations are demanding, especially in requiring predictions of outcomes as a function of alternative actions and sources of uncertainty. However, the concept of value of information is important in early framing of some decisions, before such predictions are available. We propose a novel measure of the value of information based on constructed scales (CVOI), grounded in the algebra of the expected value of perfect information (EVPI), but requiring less of experts and analysts. The CVOI calculation decomposes EVPI into a contribution representing the relevance of the uncertainty to the decision and a contribution representing the magnitude of uncertainty; constructed ratio scales are then proposed for each contribution. We demonstrate the use of CVOI to identify research priorities related to migratory bird management in the face of climate change. Funding: This work was funded in part by the U.S. Geological Survey National Climate Adaptation Science Center.
{"title":"A Simplified Method for Value of Information Using Constructed Scales","authors":"","doi":"10.1287/deca.2023.0474","DOIUrl":"https://doi.org/10.1287/deca.2023.0474","url":null,"abstract":"The value of information is a central concept in decision analysis, used to quantify how much the expected outcome of a decision would be improved if epistemic uncertainty could be resolved prior to committing to a course of action. One of the challenges, however, in quantitative analysis of the value of information is that the calculations are demanding, especially in requiring predictions of outcomes as a function of alternative actions and sources of uncertainty. However, the concept of value of information is important in early framing of some decisions, before such predictions are available. We propose a novel measure of the value of information based on constructed scales (CVOI), grounded in the algebra of the expected value of perfect information (EVPI), but requiring less of experts and analysts. The CVOI calculation decomposes EVPI into a contribution representing the relevance of the uncertainty to the decision and a contribution representing the magnitude of uncertainty; constructed ratio scales are then proposed for each contribution. We demonstrate the use of CVOI to identify research priorities related to migratory bird management in the face of climate change. Funding: This work was funded in part by the U.S. Geological Survey National Climate Adaptation Science Center.","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78126475","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Laura M. Keating, L. Randall, R. Stanton, Casey McCormack, M. Lucid, T. Seaborn, S. Converse, S. Canessa, A. Moehrenschlager
Conservation translocations, intentional movements of species to protect against extinction, have become widespread in recent decades and are projected to increase further as biodiversity loss continues worldwide. The literature abounds with analyses to inform translocations and assess whether they are successful, but the fundamental question of whether they should be initiated at all is rarely addressed formally. We used decision analysis to assess northern leopard frog reintroduction in northern Idaho, with success defined as a population that persists for at least 50 years. The Idaho Department of Fish and Game was the decision maker (i.e., the agency that will use this assessment to inform their decisions). Stakeholders from government, indigenous groups, academia, land management agencies, and conservation organizations also participated. We built an age-structured population model to predict how management alternatives would affect probability of success. In the model, we explicitly represented epistemic uncertainty around a success criterion (probability of persistence) characterized by aleatory uncertainty. For the leading alternative, the mean probability of persistence was 40%. The distribution of the modelling results was bimodal, with most parameter combinations resulting in either very low (<5%) or relatively high (>95%) probabilities of success. Along with other considerations, including cost, the Idaho Department of Fish and Game will use this assessment to inform a decision regarding reintroduction of northern leopard frogs. Conservation translocations may benefit greatly from more widespread use of decision analysis to counter the complexity and uncertainty inherent in these decisions. History: This paper has been accepted for the Decision Analysis Special Issue on Further Environmental Sustainability. Funding: This work was supported by the Wilder Institute/Calgary Zoo, the U.S. Fish and Wildlife Service [Grant F18AS00095], the NSF Idaho EPSCoR Program and the National Science Foundation [Grant OIA-1757324], and the Hunt Family Foundation. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0472 .
{"title":"Using Decision Analysis to Determine the Feasibility of a Conservation Translocation","authors":"Laura M. Keating, L. Randall, R. Stanton, Casey McCormack, M. Lucid, T. Seaborn, S. Converse, S. Canessa, A. Moehrenschlager","doi":"10.1287/deca.2023.0472","DOIUrl":"https://doi.org/10.1287/deca.2023.0472","url":null,"abstract":"Conservation translocations, intentional movements of species to protect against extinction, have become widespread in recent decades and are projected to increase further as biodiversity loss continues worldwide. The literature abounds with analyses to inform translocations and assess whether they are successful, but the fundamental question of whether they should be initiated at all is rarely addressed formally. We used decision analysis to assess northern leopard frog reintroduction in northern Idaho, with success defined as a population that persists for at least 50 years. The Idaho Department of Fish and Game was the decision maker (i.e., the agency that will use this assessment to inform their decisions). Stakeholders from government, indigenous groups, academia, land management agencies, and conservation organizations also participated. We built an age-structured population model to predict how management alternatives would affect probability of success. In the model, we explicitly represented epistemic uncertainty around a success criterion (probability of persistence) characterized by aleatory uncertainty. For the leading alternative, the mean probability of persistence was 40%. The distribution of the modelling results was bimodal, with most parameter combinations resulting in either very low (<5%) or relatively high (>95%) probabilities of success. Along with other considerations, including cost, the Idaho Department of Fish and Game will use this assessment to inform a decision regarding reintroduction of northern leopard frogs. Conservation translocations may benefit greatly from more widespread use of decision analysis to counter the complexity and uncertainty inherent in these decisions. History: This paper has been accepted for the Decision Analysis Special Issue on Further Environmental Sustainability. Funding: This work was supported by the Wilder Institute/Calgary Zoo, the U.S. Fish and Wildlife Service [Grant F18AS00095], the NSF Idaho EPSCoR Program and the National Science Foundation [Grant OIA-1757324], and the Hunt Family Foundation. Supplemental Material: The online appendix is available at https://doi.org/10.1287/deca.2023.0472 .","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89357454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents the results of four lottery-type experiments that investigate the effects of incentive structures on decision-making under uncertainty. We compare choices made with and without incentives, with fixed targets, with binary targets, and with four-outcome targets that are discretized from a logistic distribution. The results of the behavioral experiments (i) validate theoretical findings of utility functions induced by fixed and uncertain targets. Further, the behavioral results show that (ii) individuals’ choices are indeed affected by incentive structures, which we quantify by several deviation measures. (iii) Defined consistency measures show that choices under uncertain targets become less consistent as the number of uncertain target outcomes increases. The results of these experiments provide insights into the effects of setting incentive structures on decision-making behavior.
{"title":"Experimental Assessment of Utility Functions Induced by Fixed and Uncertain Targets","authors":"M. Zellner, A. Abbas","doi":"10.1287/deca.2023.0470","DOIUrl":"https://doi.org/10.1287/deca.2023.0470","url":null,"abstract":"This paper presents the results of four lottery-type experiments that investigate the effects of incentive structures on decision-making under uncertainty. We compare choices made with and without incentives, with fixed targets, with binary targets, and with four-outcome targets that are discretized from a logistic distribution. The results of the behavioral experiments (i) validate theoretical findings of utility functions induced by fixed and uncertain targets. Further, the behavioral results show that (ii) individuals’ choices are indeed affected by incentive structures, which we quantify by several deviation measures. (iii) Defined consistency measures show that choices under uncertain targets become less consistent as the number of uncertain target outcomes increases. The results of these experiments provide insights into the effects of setting incentive structures on decision-making behavior.","PeriodicalId":46460,"journal":{"name":"Decision Analysis","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2023-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89798357","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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