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Book part
Publication date: 31 January 2015

Junyi Zhang

The chapter outlines the principles underlying relative utility models, discusses the results of empirical applications and critically assesses the usefulness of this…

Abstract

Purpose

The chapter outlines the principles underlying relative utility models, discusses the results of empirical applications and critically assesses the usefulness of this specification against commonly used random utility models and other context dependence models. It also discusses how relative utility can be viewed as a generalisation of context dependency.

Theory

In contrast to the conventional concept of random utility, relative utility assumes that decision-makers derive utility from their choices relative to some threshold(s) or reference points. Relative utility models thus systematically specify the utility against such thresholds or reference points.

Findings

Examples in the chapter show that relative utility model perform well in comparison to conventional utility-maximising models in some circumstances.

Originality and value

Examples of relative utility models are rare in transportation research. The chapter shows that several recent models can be viewed as special cases of relative utility models.

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

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Article
Publication date: 1 July 2006

Terry R. Collins, Manuel D. Rossetti, Heather L. Nachtmann and James R. Oldham

To investigate the application of multi‐attribute utility theory (MAUT) to aid in the decision‐making process when performing benchmarking gap analysis.

Abstract

Purpose

To investigate the application of multi‐attribute utility theory (MAUT) to aid in the decision‐making process when performing benchmarking gap analysis.

Design/methodology/approach

MAUT is selected to identify the overall best‐in‐class (BIC) performer for performance metrics involving inventory record accuracy within a public sector warehouse. A traditional benchmarking analysis is conducted on 14 industry warehouse participants to determine industry best practices for the four critical warehouse metrics of picking and inventory accuracy, storage speed, and order cycle time. Inventory and picking tolerances are also investigated in the study. A gap analysis is performed on the critical metrics and the absolute BIC is used to measure performance gaps for each metric. The gap analysis results are then compared to the MAUT utility values, and a sensitivity analysis is performed to compare the two methods.

Findings

The results indicate that an approach based on MAUT is advantageous in its ability to consider all critical metrics in a benchmarking study. The MAUT approach allows the assignment of priorities and analyzes the subjectivity for these decisions, and provides a framework to identify one performer as best across all critical metrics.

Research limitations/implications

This research study uses the additive utility theory (AUT) which is only one of multiple decision theory techniques.

Practical implications

A new approach to determine the best performer in a benchmarking study.

Originality/value

Traditional benchmarking studies use gap analysis to identify a BIC performer over a single critical metric. This research integrates a mathematically driven decision analysis technique to determine the overall best performer over multiple critical metrics.

Details

Benchmarking: An International Journal, vol. 13 no. 4
Type: Research Article
ISSN: 1463-5771

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Book part
Publication date: 31 January 2015

Soora Rasouli and Harry Timmermans

This chapter reviews models of decision-making and choice under conditions of certainty. It allows readers to position the contribution of the other chapters in this book…

Abstract

Purpose

This chapter reviews models of decision-making and choice under conditions of certainty. It allows readers to position the contribution of the other chapters in this book in the historical development of the topic area.

Theory

Bounded rationality is defined in terms of a strategy to simplify the decision-making process. Based on this definition, different models are reviewed. These models have assumed that individuals simplify the decision-making process by considering a subset of attributes, and/or a subset of choice alternatives and/or by disregarding small differences between attribute differences.

Findings

A body of empirical evidence has accumulated showing that under some circumstances the principle of bounded rationality better explains observed choices than the principle of utility maximization. Differences in predictive performance with utility-maximizing models are however small.

Originality and value

The chapter provides a detailed account of the different models, based on the principle of bounded rationality, that have been suggested over the years in travel behaviour analysis. The potential relevance of these models is articulated, model specifications are discussed and a selection of empirical evidence is presented. Aspects of an agenda of future research are identified.

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

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Article
Publication date: 31 August 2012

Chinho Lin, Hua‐Ling Tsai, Ya‐Jung Wu and Melody Kiang

The study aims to shed light on how to identify drivers of sustainable competitive advantage under a turbulent and uncertain environment, one of the most crucial…

Abstract

Purpose

The study aims to shed light on how to identify drivers of sustainable competitive advantage under a turbulent and uncertain environment, one of the most crucial challenges faced by resource‐based strategists.

Design/methodology/approach

This study introduces a VRIO‐based framework to evaluate a firm's internal activities, in which the fuzzy set and utilities functions are adopted to identify the competitive advantage of available resources based on resource‐based theory. A case study is conducted to illustrate how the framework can be applied as a tool for exploring the potential competitiveness of a firm's core resources.

Findings

The quantitative VRIO‐based framework is a useful tool to assist top management to identify a list of potential competitive advantages of the available sources.

Originality/value

The VRIO‐based framework is built through the integration of quantitative and qualitative methods, and this innovative approach is proposed to bridge the gap between resource‐based theory and its application.

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Article
Publication date: 2 October 2007

Ana Paula Martins

The purpose of this paper is to suggest possible extensions of the baseline Rubinstein sequential bargaining structure – applied to the negotiation of stationary…

Abstract

Purpose

The purpose of this paper is to suggest possible extensions of the baseline Rubinstein sequential bargaining structure – applied to the negotiation of stationary infinitely termed contracts – that incorporate a direct reference to the “ideal” utilities of the players. This is a feature of the Kalai‐Smorodinsky cooperative solution – even if not of the generalized Nash maximand; it is usually not encountered in non‐cooperative equilibria.

Design/methodology/approach

First, it is argued that different bargaining protocols than conventionally staged are able to incorporate temporary all‐or (and)‐nothing splits of the pie. Scenarios are advanced where such episodes are interpreted either as – out of bargaining – war or unilateral appropriation events, or free experience contracts. Second, some modifications to the Rubinstein infinite horizon paradigm are experimented with, allowing for mixed strategies under alternate offers, and matching or synchronous decisions in a simultaneous (yet, discrete) bargaining environment. Solutions are derived where the reference to the winner‐takes‐it‐all outcome arises as a parallel – out‐of‐the‐protocol – outside option to the status quo point. In some cases, the limiting maximand for instantaneous bargaining was derived.

Findings

Rubinstein's optimal periodic division in a closed contract remained robust to most of the settings.

Originality/value

Presents possible extensions of the baseline Rubinstein sequential bargaining structure.

Details

International Journal of Social Economics, vol. 34 no. 11
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 7 December 2020

Matteo Balliauw, Evy Onghena and Simon Mulkens

Advertisers frequently use social media for interactive and customer-oriented relationship marketing (RM) purposes. Moreover, sports clubs and players have been using…

Abstract

Purpose

Advertisers frequently use social media for interactive and customer-oriented relationship marketing (RM) purposes. Moreover, sports clubs and players have been using their social media accounts to post content of their sponsors and other advertising companies. Such posts create visibility and have value for these advertising companies, something which has not been empirically quantified in the existing literature. Hence, this paper's purpose is to identify the factors or attributes that influence the value of such advertisement posts.

Design/methodology/approach

A discrete choice approach is used to empirically estimate the utility that sponsorship managers derive from a post advertising their company or product on football clubs' and players' social media.

Findings

The results indicate that more followers, better on-field performance and a lower price significantly increase the advertising company's utility. Moreover, the used social media channel has a significant influence too, since Facebook and Instagram are preferred over Twitter, due to the latter's limited degrees of freedom for advertisers.

Research limitations/implications

Considering additional factors such as the image fit between sponsor and sponsee and presence on the Chinese social media market offers an interesting avenue for future research.

Practical implications

The empirical estimates allow commercial managers of clubs and players to derive companies' relative willingness to pay (WTP) for changes in characteristics of advertisements on their social media from the calculated utilities. This information can be used in the pricing decision when social media posts are sold or included in sponsorship packages.

Originality/value

This is the first study applying discrete choice modelling to link social media marketing (SMM) and sports marketing.

Details

International Journal of Sports Marketing and Sponsorship, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1464-6668

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Article
Publication date: 5 September 2016

Nicholas Paulson, Gary Schnitkey and Patrick Kelly

The purpose of this paper is to evaluate the risk management benefits provided by the supplemental coverage option (SCO) insurance plan which was created in the 2014 Farm…

Abstract

Purpose

The purpose of this paper is to evaluate the risk management benefits provided by the supplemental coverage option (SCO) insurance plan which was created in the 2014 Farm Bill. Specifically, the marginal expected utility benefits are compared with the potential additional subsidy cost introduced by the new program for a stylized example of a corn producer.

Design/methodology/approach

The paper uses a stylized simulation model examines the preferred insurance program choice for a typical Midwestern corn farmer. The expected utility of the farmer is calculated under their preferred insurance program choice both with and without the availability of the SCO program, and compared to the case where crop insurance is not available. Scenarios are examined for a range of farmer risk aversion levels, different levels of correlation between farm-level and county-level corn yields, and case with and without insurance premium subsidies.

Findings

The SCO program is found to enter into the preferred insurance program choice for risk averse farmers. As risk aversion increases, farmers are estimated to prefer higher coverage levels for individual products along with SCO coverage. While the availability of existing crop insurance programs are shown to substantially increase the expected utility of farmers, the marginal impact of adding SCO to the crop insurance program is relatively small. Furthermore, the additional expected benefits generated by SCO are shown to include both risk management and expected return components. With subsidies removed, the estimated marginal benefits provided by SCO are reduced significantly.

Practical implications

The findings of this paper can help inform the policy debate for future farm bills as agricultural support programs continue to evolve. The results in this paper can also be used to help explain farm-level decision making related to crop insurance program choices.

Originality/value

This paper contributes to the literature by documenting a new, federally supported risk management programs made available to farmers in the 2014 Farm Bill and evaluates the marginal benefits the SCO program offers US crop producers.

Details

Agricultural Finance Review, vol. 76 no. 3
Type: Research Article
ISSN: 0002-1466

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Book part
Publication date: 20 May 2003

Jean-Yves Duclos, Vincent Jalbert and Abdelkrim Araar

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely…

Abstract

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.

Details

Fiscal Policy, Inequality and Welfare
Type: Book
ISBN: 978-1-84950-212-2

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Article
Publication date: 3 May 2011

Doris Warneke and Martin Schneider

Heterogeneous employee preferences may encumber employers' attempts to standardize expatriate compensation packages. The purpose of this paper is to outline an empirical…

Abstract

Purpose

Heterogeneous employee preferences may encumber employers' attempts to standardize expatriate compensation packages. The purpose of this paper is to outline an empirical approach that informs employers about their employees' preferences concerning an international assignment.

Design/methodology/approach

Utility theory and conjoint measurement techniques are applied. Employees, it is argued, derive utility from the multiple characteristics of the assignment in terms of working conditions, career prospects, and living conditions. Employees perceive that utility relative to their country‐specific status quo. Such preferences may be measured with conjoint analysis.

Findings

To illustrate the methodology, German and Spanish employees in one company were given the scenario of an assignment in the USA. Measured preferences, though partly heterogeneous, were systematically related to the home country's institutional and cultural environment (societal effect).

Research limitations/implications

More countries should be included in future studies. Studies of this kind may be related to the concepts of institutional and cultural distance.

Practical implications

Based on these findings, worldwide policies and procedures on expatriate compensation packages may be formulated to strike a better balance between standardization and the needs of a heterogeneous global workforce.

Originality/value

The paper presents a first systematic model of the preferences that guide the employee decision to accept or decline an international assignment, and it illustrates how these preferences can be measured.

Details

Cross Cultural Management: An International Journal, vol. 18 no. 2
Type: Research Article
ISSN: 1352-7606

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Article
Publication date: 6 July 2012

Marina Dias de Faria, Jorge Ferreira da Silva and Jorge Brantes Ferreira

The objective of this study is to determine the relative importance that the visually impaired give to restaurant service attributes during leisure outings, and the…

Abstract

Purpose

The objective of this study is to determine the relative importance that the visually impaired give to restaurant service attributes during leisure outings, and the relative utility they allocate to the various levels of these attributes.

Design/methodology/approach

The study was conducted in two stages. The first stage consisted of exploratory research using focus groups; the second consisted of a survey using a structured questionnaire administered to 203 visually impaired consumers; conjoint analysis was used.

Findings

The ideal restaurant profile for survey respondents is one in which: the menu is read by the server; service is provided by empathetic servers; low‐intensity light and sound are used; round tables are preferred over rectangular tables; and the server can be summoned using a button.

Research limitations/implications

The use of a non‐probabilistic sample may limit the generalizability of findings.

Practical implications

This study's results can be useful to restaurant managers by improving their understanding of the needs of visually‐impaired consumers.

Social implications

The study contributes to the inclusion in society of the visually impaired as consumers by giving them a voice to express their needs and wants.

Originality/value

Previous studies have not considered the relative utility conferred to restaurant attributes by consumers. The use of conjoint analysis allows the evaluation of the relative importance of these attributes and their levels, while at the same time shedding light on tradeoffs made by the visually impaired consumer in selecting restaurant attributes.

Details

International Journal of Contemporary Hospitality Management, vol. 24 no. 5
Type: Research Article
ISSN: 0959-6119

Keywords

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