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In recent years, there has been a growing awareness that most decision makers are not only concerned with the financial implications of information technology/system (IT/IS) projects, but they are also concerned with other objectives such as competitive advantage, market share and future growth. Nowadays, multi‐criteria decision‐making methods are gaining importance due to their inherent ability to judge different alternative scenarios for possible selection of the best alternative. This paper provides a decision‐making framework for senior executives when selecting innovative IT/IS projects. The proposed framework is based on the multi‐criteria utility theory (MCUT) combined with information economics principles to select IT/IS project(s) based on “business value” and “risk” criteria. MCUT has the advantage of taking into consideration the decision maker’s preferences in the form of utility functions defined over a set of tangible and intangible criteria. To illustrate the application of the proposed framework, a hypothetical case study is provided, where input elicited from four engineering professionals is used to develop utility functions for a predefined set of selection criteria.

The purpose of this paper is to demonstrate a methodology to design a supply chain with a view to achieve a strategic fit between competitive and supply chain strategies.

Quality function deployment (QFD)-based optimization methodology is employed to design a supply chain for a product through aligning the competitive and supply chain strategies. Normal boundary intersection (NBI) method is adopted to obtain optimal weights of the supply chain design objectives. Weighted additive model is developed for multi-objective optimization. Utility-based attribute function, which structure the relationship between the elements of competitive and supply chain strategies is established. The utility functions and the information contained in the House of Quality (HOQ) of QFD are used to define the supply chain performance (SCP).

SCP index is computed using the set of supply chain design objectives obtained by solving the weighted additive model. On the basis of SCP index, the supply chain activities are planned accordingly. An illustrative example is presented in this paper to describe the QFD-based optimization methodology for designing a supply chain.

QFD-based optimization is a novel approach to design a supply chain with a focus on aligning competitive and supply chain strategies.

This paper provides household lifetime inequality indexes derived from representative U.S. labor market data. We obtain this result by using estimates of the household search model proposed by Flabbi and Mabli (2012). Inequality indexes computed on the benchmark model shows that inequality in utility values is substantially different from inequality in earnings and wages and that inequality at the cross-sectional level is significantly different from inequality at the lifetime level. Both results deliver original policy implications that would have not been captured without using our approach. In particular, we find that a counterfactual policy experiment consisting in a mean-preserving spread of the wage offers distributions increases lifetime inequality in wages and earnings but not in utility. When comparing inequality at the individual level between men and women, we find inequality in wages and earnings to be higher for husbands than wives but inequality in utility to be higher for wives. A counterfactual decomposition shows that the job offers parameters are the main source of the gender differential.

The prospect theory is potentially an essential ingredient in modeling the disposition effect. However, many scholars have tried to explain the disposition effect with the help of prospect theory and they came to opposite conclusions. The purpose of this paper is to examine the impact of value function of the prospect theory on predicting the disposition effect.

Lagrange multiplier optimization and dynamic programming method are used to solve the representative investor’s optimal portfolio choice problem. Furthermore, numerical simulation is used to compare the prediction ability of different types of value function.

The authors support that the value function has a crucial role in predicting the disposition effect with prospect theory, i.e. the curvature and boundedness of the value function may influence the performance of applying the prospect theory in the disposition effect. They conclude that a piecewise negative exponential value function can predict the disposition effect, while others like the piecewise power value function may not.

Extant literature about modeling the disposition effect with the prospect theory mostly focus on the time when gain-loss utility occurs or the selection of reference point. This paper based on the value function properties provides a new perspective in analyzing the crucial role that value function has in predicting financial market anomalies.

Behavioral economics poses a challenge for the welfare evaluation of choices, particularly those that involve risk. It demands that we recognize that the descriptive account of behavior toward those choices might not be the ones we were all taught, and still teach, and that subjective risk perceptions might not accord with expert assessments of probabilities. In addition to these challenges, we are faced with the need to jettison naive notions of revealed preferences, according to which every choice by a subject expresses her objective function, as behavioral evidence forces us to confront pervasive inconsistencies and noise in a typical individual’s choice data. A principled account of errant choice must be built into models used for identification and estimation. These challenges demand close attention to the methodological claims often used to justify policy interventions. They also require, we argue, closer attention by economists to relevant contributions from cognitive science. We propose that a quantitative application of the “intentional stance” of Dennett provides a coherent, attractive and general approach to behavioral welfare economics.

Purpose — The overall quality of an information retrieval system depends on many different aspects of the system and its users' information seeking behaviour, such as the speed of the system, the user interface, the query language and the features provided by the engine. One of the most important aspects is the effectiveness of the retrieval system, i.e. its ability to retrieve items that are relevant to the information need of an end user. This chapter focuses on methods for measuring effectiveness, in particular focusing on recent work that more directly models the utility of an engine to its users.

Methodology/approach — We discuss traditional approaches to effectiveness evaluation based on test collections, then transition to approaches based on test collections along with explicit models of user interaction with search results. We contrast this with approaches for which the user is ‘in the loop’, such as user studies and online evaluations.

Research limitations/implications — If it were possible to model users perfectly, we could directly estimate the utility of a search engine to its users; this would undoubtedly have a transformative effect on information retrieval and web search research. In practice, this goal will never be achievable because users exhibit far too much variability in how they approach the search engine, and furthermore provide valuable feedback that models and simulations cannot provide. Nevertheless, better models of user interaction will help develop better web search engines for a wider variety of tasks more rapidly.

Originality/value of paper — This is the first work that surveys recent work on user model-based evaluation and places it in a context with traditional evaluation based on the Cranfield paradigm.

Over the past 25 years, direct cash transfers (often abbreviated as direct benefit transfer, DBT) to the poorer section of the society are gaining popularity over explicit subsidization of prices of essential commodities. One of the main arguments in favor of DBT is that it will cost the government less money and yet, the consumer benefit will be high. This paper aims to examine the proposition critically. Removal of price support exposes the consumers to market risk, and any income support programme must compensate the consumers accordingly.

The authors use a theoretical study where the model of a representative consumer under different specification of preferences is used to compare programme costs under price stabilization and income support programmes.

What the authors show in the paper that the comparative cost of the programmes crucially depends on the nature of preferences, as well as the good under question. For certain specifications of the indirect utility function and the marginal utility of money, one programme may cost less than the other. Any policymaker must take account of such nuances before making a blanket prescription.

The main limitation is that only a representative consumer is taken.

The specification of indirect utility function plays a decisive role in deciding, which one these two policies, DBT or stabilizing price at a fixed level.

The main novelty of the paper is in the different specifications of the indirect utility function considered in the paper.

Quality Function Deployment (QFD) proposes to take into account the “voice of the customer,” through a list of customer needs, which are (qualitatively) mapped to technical requirements in House One. But customers do not perceive products in this space, nor do they not make purchase decisions in this space. Marketing specialists use statistical models to map between a simpler space of customer perceptions and the long and detailed list of needs. For automobiles, for example, the main axes in perceptual space might be categories such as luxury, performance, sport, and utility. A product’s position on these few axes determines the detailed customer requirements consistent with the automobiles’ position such as interior volume, gauges and accessories, seating type, fuel economy, door height, horsepower, interior noise level, seating capacity, paint colors, trim, and so forth. Statistical models such as factor analysis and principal components analysis are used to describe the mapping between these spaces, which we call House Zero.

This paper focus on House One. Two important steps of the product development process using House One are: (1) setting technical targets; (2) identifying the inherent tradeoffs in a design including a position of merit. Utility functions are used to determine feature preferences for a product. Conjoint analysis is used to capture the product preference and potential market share. Linear interpolation and the slope point formula are used to determine other points of customer needs. This research draws from the formal mapping concepts developed by Nam Suh and the qualitative maps of quality function deployment, to present unified information and mapping paradigm for concurrent product/process design. This approach is the virtual integrated design method that is tested upon data from a business design problem.

The purpose of this paper is to explore the extent to which formal logic can be applied to conflict analysis and resolution. It is motivated by the idea that conflicts can be understood as inconsistent sets of interests.

A simple propositional model, based on propositional logic, which can be used to analyze conflicts, has been introduced and four algorithms have been presented to generate possible solutions to a conflict. The model is illustrated by applying it to the conflict between the Obama administration and the Syrian Government in September 2013 over the destruction of Syria’s chemical weapons programme.

The author shows how different solutions, such as compromises, minimally invasive solutions or solutions compatible with certain pre-defined norms, can be generated by the model. It is shown how the model can operate in situations where the game-theoretic model fails due to a lack of information about the parties’ utility values.

The model can be used as a theoretical framework for future experimental research and/or to trace the course of particular conflict scenarios.

The model can be used as the basis for building software applications for conflict resolution practitioners, such as negotiators or mediators.

While the idea of using logic to analyse the structure of conflicts and generate possible solutions is not new to the field of conflict studies, the model presented in this paper provides a novel way of understanding conflicts for both researchers and practitioners.