Parental investment decision rules and the Concorde fallacy

1985 ◽  
Vol 17 (1) ◽  
pp. 43-45 ◽  
Author(s):  
Robert Craig Sargent ◽  
Mart R. Gross
Keyword(s):  
Parental Investment ◽  
Investment Decision ◽  
Decision Rules ◽  
Concorde Fallacy

scholarly journals Portfolio Model Based on Scenario Tree

2021 ◽  
Vol 251 ◽  
pp. 01114
Author(s):  
Haiyan Xuan ◽  
Cunliu Yao ◽  
Hongjian Li ◽  
Xiaoke Chang
Keyword(s):  
Monte Carlo ◽  
Stock Returns ◽  
Stock Return ◽  
Investment Decision ◽  
Decision Rules ◽  
Return Rate ◽  
Scenario Tree ◽  
The Monte Carlo Method ◽  
The Difference ◽  
Mean Variance

The uncertainty of return rate will affect the investment decision. In this paper, the ARMA-GARCH model is used to describe the data characteristics of stock returns, and the Monte Carlo method is used to construct a scenario tree containing the stock return rate and node probability. The decision rules are used to determine the nodes on the scene tree, and two mean-variance models are established based on the scene tree. Finally, four stock data are selected to optimize the portfolio of the constructed model, the results show that the scenario tree has good advantages in describing the uncertainty problem, and the constructed model is effective and feasible; the difference between the two models is analyzed and compared, which provides a reference for different investors.

scholarly journals Guidelines for the investment choice of capital projects by public corporations

2010 ◽  
Vol 7 (3) ◽  
pp. 407-415
Author(s):  
Wessel Pienaar
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Decision Rules ◽  
Capital Projects ◽  
Public Corporations ◽  
Project Appraisal ◽  
Investment Choice ◽  
Long Run ◽  
Selection Of

This article provides guidelines on how public corporations can choose capital projects on the basis of economic and financial criteria. Project appraisal, selection and prioritisation criteria are listed, followed by a description of the way in which the result of each appraisal technique should be interpreted. Criteria that should be adhered to in the selection of mutually exclusive projects and the prioritisation of functionally independent projects in order to maximise the net output of public corporations in the long run are supplied. Applications of the proposed investment decision rules are illustrated by examples. Two techniques are proposed that may be used as additional decision-making instruments when evaluated projects show similar degrees of long-term financial viability.

scholarly journals The application of systems analysis to enhance the performance of logistic systems in supporting economic growth and development

2014 ◽  
Vol 11 (3) ◽  
pp. 485-495
Author(s):  
Wessel Pienaar
Keyword(s):  
Systems Analysis ◽  
Investment Decision ◽  
Decision Rules ◽  
Decision Makers ◽  
Capital Projects ◽  
Economic Growth And Development ◽  
Project Appraisal ◽  
Long Run ◽  
Selection Of

This paper provides guidelines on how decision-makers can choose capital projects on the basis of economic and financial criteria by applying a systems-analysis approach. Project appraisal, selection and prioritisation criteria are listed, followed by a description of the way in which the result of each appraisal technique should be interpreted. Criteria that should be adhered to in the selection of mutually exclusive projects and the prioritisation of functionally independent projects in order to maximise net output in the long run are supplied. Applications of the proposed investment decision rules are illustrated by examples. Two techniques are proposed that may be used as additional decision-making instruments when evaluated projects show similar degrees of long-term financial viability. Five performance areas that collectively best represent successful organisational logistics performance are detailed.

scholarly journals The co-evolution of human fertility and wealth inheritance strategies

1998 ◽  
Vol 353 (1367) ◽  
pp. 389-397 ◽  
Author(s):  
Ruth Mace
Keyword(s):  
Parental Investment ◽  
Life History Theory ◽  
Decision Rules ◽  
Optimal Decision ◽  
High Fertility ◽  
Raising Children ◽  
Number Of Children ◽  
Future Production ◽  
Human Reproductive ◽  
Living Children

Life history theory concerns the scheduling of births and the level of parental investment in each offspring. In most human societies the inheritance of wealth is an important part of parental investment. Patterns of wealth inheritance and other reproductive decisions, such as family size, would be expected to influence each other. Here I present an adaptive model of human reproductive decision-making, using a state-dependent dynamic model. Two decisions made by parents are considered: when to have another baby, and thus the pattern of reproduction through life; and how to allocate resources between children at the end of the parents life. Optimal decision rules are those that maximize the number of grandchildren. Decisions are assumed to depend on the state of the parent, which is described at any time by two variables: number of living sons, and wealth. The dynamics of the model are based on a traditional African pastoralist system, but it is general enough to approximate to any means of subsistence where an increase in the amount of wealth owned increases the capacity for future production of resources. The model is used to show that, in the unpredictable environment of a traditional pastoralist society, high fertility and a biasing of wealth inheritance to a small number of children are frequently optimal. Most such societies are now undergoing a transition to lower fertility, known as the demographic transition. The effects on fertility and wealth inheritance strategies of reducing mortality risks, reducing the unpredictability of the environment and increasing the costs of raising children are explored. Reducing mortality has little effect on completed family sizes of living children or on the wealth they inherit. Increasing the costs of raising children decreases optimal fertility and increases the inheritance left to each child at each level of wealth, and has the potential to reduce fertility to very low levels. The results offer an explanation for why wealthy families are frequently also those with the smallest number of children in heterogenous, post-transition societies.

scholarly journals INVESTMENT, IRREVERSIBILITY, AND UNCERTAINTY IN ENERGY BEET–BASED ETHANOL

2016 ◽  
Vol 48 (4) ◽  
pp. 403-429 ◽  
Author(s):  
KASSU WAMISHO HOSSISO ◽  
DAVID RIPPLINGER
Keyword(s):  
Real Options ◽  
Investment Decision ◽  
Market Price ◽  
Decision Rules ◽  
Optimal Investment ◽  
Irreversible Investment ◽  
Energy Beet ◽  
Gross Margins ◽  
Entry Decisions

Abstract:This study evaluates optimal investment decision rules for an energy beet ethanol firm to exercise the option to invest, mothball, reactivate, and exit the ethanol market, considering uncertainty and volatility in the market price of ethanol, feedstock, and irreversible investment. A real options framework is used to compute gross margins of ethanol that trigger entry into and exit from the ethanol market. Results show that volatility in ethanol gross margins has much greater effects on exit and entry decisions than investment costs, and it also causes firms to wait longer before entering the ethanol market and, once active, to wait longer before exiting.

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