scholarly journals Mechanism Design of Fashion Virtual Enterprise under Monitoring Strategy

2014 ◽  
Vol 2014 ◽  
pp. 1-8 ◽  
Author(s):  
Min Huang ◽  
Kegui Chen ◽  
Chunhui Xu ◽  
Wai-Ki Ching ◽  
Xingwei Wang
Keyword(s):  
Moral Hazard ◽  
Virtual Enterprise ◽  
Risk Attitude ◽  
Risk Level ◽  
Risk Averse ◽  
Monitoring Strategy ◽  
Monitoring Cost ◽  
Agent Based ◽  
Effort Level ◽  
Monitoring Effort

Designing a revenue sharing contract to prevent the moral hazard is one of the most important issues in virtual enterprise (VE). As the partners’ productive effort level cannot be observed by the owner and other partners, there is usually moral hazard problem in VE. To mitigate the moral hazard, the owner sets the monitoring effort with monitoring cost. Considering a risk-neutral owner and multiple downside risk-averse partners, the owner’s problem of determining the monitoring effort and incentive intensity to maximize his profit while the partners determine their productive effort to maximize their profit is addressed. The principal agent based model of this problem is proposed. By solving the model, the optimal strategy of owner and partner is derived. By comparing with the no monitoring scenario, we find that implementing suitable monitoring strategy can reduce the moral hazard effectively. Finally, by analyzing the partners’ risk attitude, the result reveals that the lower the risk level of the partner is, the more the owner wants. These results suggest that VE should not only focus on the risk attitude but also on monitoring.

Risk Attitude and Corporate Investment under Output Market Uncertainty: Evidence from The Mekong River Delta, Vietnam

2016 ◽  
pp. 59-70
Author(s):  
Ninh Le Khuong ◽  
Nghiem Le Tan ◽  
Tho Huynh Huu
Keyword(s):  
Negative Relationship ◽  
Risk Attitude ◽  
Business Strategies ◽  
Risk Averse ◽  
Market Uncertainty ◽  
Firm Investment ◽  
Output Market ◽  
The Impact ◽  
The Relationship

This paper aims to detect the impact of firm managers’ risk attitude on the relationship between the degree of output market uncertainty and firm investment. The findings show that there is a negative relationship between these two aspects for risk-averse managers while there is a positive relationship for risk-loving ones, since they have different utility functions. Based on the findings, this paper proposes recommendations for firm managers to take into account when making investment decisions and long-term business strategies as well.

scholarly journals OPTIMAL OUTCOME SHARING WITH A CONSORTIUM OF CONTRACTORS

2015 ◽  
Vol 22 (5) ◽  
pp. 655-665 ◽  
Author(s):  
S. Mahdi HOSSEINIAN ◽  
David G. CARMICHAEL
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Risk Averse ◽  
Optimal Outcome ◽  
Original Solution ◽  
Project Outcome ◽  
Risk Neutral ◽  
Current Practices

Where a consortium of contractors is involved, there exist no guidelines in the literature on what the outcome sharing arrangement should be. The paper addresses this shortfall. It derives the optimal outcome sharing arrangement for risk-neutral and risk-averse contractors within the consortium, and between the consortium and a risk-neutral owner. Practitioners were engaged in a designed exercise in order to validate the paper’s propositions. The paper demonstrates that, at the optimum: the proportion of outcome sharing among contractors with the same risk-attitude should reflect the levels of their contributions; the proportion of outcome sharing among contractors with the same level of contribu­tion should be lower for contractors with higher levels of risk aversion; a consortium of risk-neutral contractors should receive or bear any favourable or adverse project outcome respectively; and the proportion of outcome sharing to a con­sortium of risk-averse contractors should reduce, and the fixed component of the consortium fee should increase, when the contractors become more risk-averse or the level of the project outcome uncertainty increases. The paper proposes an original solution to the optimal sharing problem in contracts with a consortium of contractors, thereby contributing to current practices in contracts management.

Cutoff Threshold Decisions for Classification Algorithms with Risk Aversion

2021 ◽  
Author(s):  
Andrea C. Hupman
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Classification Algorithm ◽  
Classification Algorithms ◽  
Risk Averse ◽  
Optimal Cutoff ◽  
Data Set ◽  
Risk Neutral ◽  
Bayes Algorithm ◽  
Cutoff Threshold

Classification algorithms predict the class membership of an unknown record. Methods such as logistic regression or the naïve Bayes algorithm produce a score related to the likelihood that a record belongs to a particular class. A cutoff threshold is then defined to delineate the prediction of one class over another. This paper derives analytic results for the selection of an optimal cutoff threshold for a classification algorithm that is used to inform a two-action decision in the cases of risk aversion and risk neutrality. The results provide insight to how the optimal cutoff thresholds relate to the associated costs and the sensitivity and specificity of the algorithm for both the risk neutral and risk averse decision makers. The optimal risk averse threshold is not reliably above or below the optimal risk neutral threshold, but the relation depends on the parameters of a particular application. The results further show the risk averse optimal threshold is insensitive to the size of the data set or the magnitude of the costs, but instead is sensitive to the proportion of positive records in the data and the ratio of costs. Numeric examples and sensitivity analysis derive further insight. Results show the percent value gap from a misspecified risk attitude increases as the specificity of the classification algorithm decreases.

scholarly journals SEMI-AUTOMATED DETECTION OF SURFACE DEGRADATION ON BRIDGES BASED ON A LEVEL SET METHOD

2015 ◽  
Vol XL-3/W3 ◽  
pp. 15-21 ◽  
Author(s):  
A. Masiero ◽  
A. Guarnieri ◽  
F. Pirotti ◽  
A. Vettore
Keyword(s):  
Laser Scanning ◽  
Automated Analysis ◽  
Human Beings ◽  
Monitoring Cost ◽  
Public And Private ◽  
Skilled Personnel ◽  
Monitoring Procedure ◽  
Monitoring Effort ◽  
The One ◽  
Human Usage

Due to the effect of climate factors, natural phenomena and human usage, buildings and infrastructures are subject of progressive degradation. The deterioration of these structures has to be monitored in order to avoid hazards for human beings and for the natural environment in their neighborhood. Hence, on the one hand, monitoring such infrastructures is of primarily importance. On the other hand, unfortunately, nowadays this monitoring effort is mostly done by expert and skilled personnel, which follow the overall data acquisition, analysis and result reporting process, making the whole monitoring procedure quite expensive for the public (and private, as well) agencies. <br><br> This paper proposes the use of a partially user–assisted procedure in order to reduce the monitoring cost and to make the obtained result less subjective as well. The developed method relies on the use of images acquired with standard cameras by even inexperienced personnel. The deterioration on the infrastructure surface is detected by image segmentation based on a level sets method. The results of the semi-automated analysis procedure are remapped on a 3D model of the infrastructure obtained by means of a terrestrial laser scanning acquisition. <br><br> The proposed method has been successfully tested on a portion of a road bridge in Perarolo di Cadore (BL), Italy.

scholarly journals Responsibility Center Budgeting as a Mechanism to Deal with Academic Moral Hazard

2019 ◽  
Vol 49 (3) ◽  
pp. 13-23
Author(s):  
Gordon M. Myers
Keyword(s):  
Moral Hazard ◽  
Risk Averse ◽  
Central Administration ◽  
Financial Responsibility ◽  
The Right ◽  
Responsibility Center Budgeting ◽  
The University ◽  
Large Research ◽  
Responsibility Center

Universities face inherent informational asymmetries. These make university budgeting prone to various challenges including moral hazard. The last forty years has seen some large research- intensive universities move from centralized incremental budgeting to decentralized Responsibility Center Budgeting (RCB). It is assumed that a faculty chooses a level of costly effort in generating revenue for the university. The level of faculty effort is not observable by the central administration. When there is no revenue uncertainty or when the faculty is not risk averse, pure RCB is best from the perspective of the administration. The intuition is that pure RCB fully aligns financial responsibility with academic authority, that is, it makes the faculty the residual claimant. Once the faculty is risk averse, partial RCB is optimal. Partial RCB provides a balance between providing the right incentives to the faculty and the university reducing the revenue risk faced by the faculty.

Information Fake in Supply Chains

2011 ◽  
Vol 267 ◽  
pp. 958-962
Author(s):  
Jiang Hong
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Supply Chains ◽  
Information Management ◽  
Stable Distribution ◽  
Risk Attitude ◽  
Risk Averse ◽  
Stable States ◽  
Stochastically Stable

In this paper, we set risk attitude into decision making research for the supply chain manage. We focus on the information management. We discuss the stable states and the stochastically stable distribution for the fake game in the supply chain. We find there always exist information fake behaviors of low-yield suppliers. And, the less risk averse suppliers are, the more information fake they use.

scholarly journals Analysis of Farmers’ Stated Risk Using Lotteries and Their Perceptions of Climate Change in the Northwest of Mexico

Agronomy ◽  
2018 ◽  
Vol 9 (1) ◽  
pp. 4 ◽  
Author(s):  
Miguel Orduño Torres ◽  
Zein Kallas ◽  
Selene Ornelas Herrera
Keyword(s):  
Climate Change ◽  
Production Management ◽  
Public Support ◽  
Irrigation District ◽  
Risk Level ◽  
Risk Averse ◽  
Factors Affecting ◽  
Face To Face ◽  
Weather Patterns ◽  
Weed Growth

Risk attitudes are relevant factors affecting production, management and investment decisions at the farm level. They are key factors related to farmers’ attitudes towards the environment and climate change. Several methodological approaches, which were considered to be preferable for measuring the level of risk of an economic agent, ranging from highly risk-tolerant to highly risk-averse attitudes, are available. The Multiple Price List (MPL) method is one of the stated approaches that is gaining relevance. In this study, we apply the MPL and relate the risk outcomes to farmers’ socio-economic characteristics and their perceptions of the environment and climate change. Data were collected using a face-to-face survey, carried out with a group of 370 farmers of an irrigation district, located in the northwest of Mexico. The results showed a risk level of about 0.32, according to the Constant Relative Risk Aversion (CRRA) coefficient, locating farmers of the region in a risk-averse group. The heterogeneity analysis showed that the socioeconomic factors and the perceptions of climate change are related to the farmers´ stated risk level. Farmers who are young women, with a tendency to use public support for structural investment, were shown to be risk-tolerant. Farmers considered floods, hail, diseases, pests, and weed growth incidences to be the most frequent weather patterns in the region.

Knowledge Base Development in Virtual Enterprise Network as Support for Workplace Risk Assessment

2011 ◽  
Vol 2 (3) ◽  
pp. 44-60
Author(s):  
George Dragoi ◽  
Anca Draghici ◽  
Sebastian Marius Rosu ◽  
Alexandru Radovici ◽  
Costel Emil Cotet
Keyword(s):  
Risk Assessment ◽  
New Product Development ◽  
Process Management ◽  
Risk Estimation ◽  
Virtual Enterprise ◽  
Knowledge Bases ◽  
Risk Level ◽  
Business Services ◽  
Enterprise Network ◽  
Risk Management Process

The article presents research results based on the concept of collaborative infrastructure (as the virtual enterprise network PREMINV e-platform from “Politehnica” University of Bucharest, Romania), in order to unify existing standards for supply chain management and to provide support in various decision making processes in manufacturing supply networks. The intent is to facilitate and enhance the required knowledge management processes linked with the business process management. The virtual enterprise network expects to reduce small and medium-sized enterprises involvement in networking efforts, enable better and faster decision processes and promote the development of the business services. In addition, the new product development paradigm requires software tools for risk estimation and assessment. For this purpose, the authors describe a knowledge bases method build and use for the professional risk assessment as part of risk management process. The risk level is established based on the probability and severity of its consequences.

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