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Several behavioral scientists have contributed to special issues of the "Decision Science" journal. K. MacCrimmon and J. Siu tackled the significant problem of modeling and measuring and individual decision maker's inevitable trade-offs. The authors find that the choice mode consistently exceeds the equivalence mode in its predictive accuracy. R. Duncan's paper examined possible determinants of the structure of decision units within organization. A. Delbecq studied contextual variables affecting decision making in program planning. Lastly, V. Vroom and A. Jago wrote a paper about decision making as a social process.

Econometric model building of the type represented in the Duesenberry-Bosworth paper was at best an attempt to see whether systems of, say more than 25 equations, add much to our knowledge of the economy and the response to policy changes. They have not, I believe, at least to this point, and I am not optimistic about a change in the next few years, instead of commenting on the details of the particular models presented at this session, I will explain some of the reasoning that brings me to that conclusion. Before doing so, let me make clear that my comments are not directed at either "theory" or empirical science. There is very little of either in current econometric practice. I view my comments as a criticism of large models, models of twenty-five or more equations, not as a criticism of modelling or testing economic hypotheses. [ABSTRACT FROM AUTHOR]

This paper has introduced L(W[sub 0], k, A) and R(W[sub 0], k, A) as three-parameter risk measures embodying decisions about a reference level about which deviations are to be measured, the relative importance of small versus large deviations, and the range of deviations that will be included in the risk measure. The popular risk measures of variance, semi-variance, mean absolute deviation, and probability of an outcome worse than some prespecified level are special cases of L(W[sub 0], k, A) and standard deviation is a special case of R(W[sub 0], k, A). These risk measures were shown to differ in their choice of one or more of the parameters W[sub 0], k, and A. It was shown that both L and R are monotone increasing functions of A; however, neither L nor R are necessarily monotone increasing functions of k. Clearly L(W[sub 0], k, A) and R(W[sub 0], k, A), are not the only potentially useful functions of the three decision parameters that have been implicit in the selection of the popular risk measures; they are, however, a rich and fairly general family. Further study of their properties should lead to advances in the theory of risk and specification of criteria for the selection of risk measures. This paper has attempted to establish a foundation for these advances. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to make a detailed comparison of three macroeconometric models of the U.S. economy with regard to their predictive ability and policy multiplier properties. Three models are the St. Louis Model, the Wharton Model and the M.P.S. Model. These models are constructed with different emphasis on the treatment of the monetary phenomena, depending upon the philosophy of the model builder. They may respectively be called a monetarist model, a Keynesian-type income-expenditure model, and a structural model which emphasizes the monetary structure for the stabilization policy analysis. The structure of each model is not discussed in this paper but only a brief sketch of their special features is given in the next section. The predictive performance and the policy multiplier analysis are discussed in the 3rd and 4th sections, followed by some concluding remarks. [ABSTRACT FROM AUTHOR]

The article analyzes economist James Ohlson's paper "Analysis of the Usefulness of Accounting Data for the Portfolio Decision: A Decision-Theory Approach," in order to determine if he's making a model comparison or a model choice. Ohlson's thesis is that he used methods of comparing models, but the author demonstrates the inaccuracies in that thesis. The author tests Ohlson's findings and also considers the portfolio-choice problem and whether the findings are conditional upon the comparison of the forecasting models used.

A conference paper on the impact of monetary policy by testing a structural model with a simultaneous-equation estimation method to evaluate what influence monetary authorities can have through policy. Mathematical models are used that have three different structural equations for the supply function and demand function of balances and a reduced-form income equation. Exogeneity can be used by authorities to meet goals such as changes in the money supply or to adjust interest rates.

The article discusses the effects of accounting variations on decision making and the paper "An Experimental Design for Study of Effects of Accounting Variations in Decision Making" by R.E. Jensen. The statistical methodology and design used by Jensen in his research of the effects of alternative accounting reporting techniques in the selection of portfolios and their security evaluation is examined as is the data collection. The limitation of whether or not there was adequate control over the research environment and the probability level of the statistical tests is not known in Jensen's paper because he does not mention these issues.

This paper describes the application of a linear programming model to the process of resource allocation at Illinois State University. The model developed is a general model designed to assist academic administrators in allocating the scarce resources at their disposal. The model, and the assumptions upon which it is based, may be altered to suit the particular decision criteria of any particular academic institution. The linear programming model developed here maximizes an objective function which reflects the total net social profit realized by the university on its outputs to society. This objective function was maximized subject to a myriad of constraints which reflected the limitations of budget, space, and other scarce inputs. Further, the constraints reflect the joint interdependency of many parts of the university and the particular educational delivery system employed by a given department. The outputs of the model include the optimal mixture of academic outputs by the university, the optimal distribution and usage of inputs inside the university, and the shadow price of each input. While the linear programming model developed here is general and may be applied to any university, it was applied to Illinois State University in this paper. In the case of Illinois State University, the model recommended a substantial reduction in emphasis upon teacher education. [ABSTRACT FROM AUTHOR]

The primary objectives of this article will be to reconcile the several lease or buy models and identify points where different choices will lead to different conclusions. However, the immediate motivation is the recent article by Johnson and Lewellen on the lease-or-buy decision in this journal. They state, "We will first indicate our disaffections with extant models of this process and then suggest an alternative--allegedly superior--model." For ease in comparing the results of this paper with those of Johnson and Lewellen (hereafter referred to as J & L), to the extent it is feasible, the same set of symbols and equations will be used. [ABSTRACT FROM AUTHOR]

The use of search and heuristic methods as a means of solving nonlinear aggregate planning models has been given considerable attention in recent years. A few of these methods have shown promising results. In this paper a sectioning search procedure is explored as an alternative means of solving nonlinear aggregate planning models. Application is made to two test cases, and the results are compared with those of other solution methods. [ABSTRACT FROM AUTHOR]

This article presents views of the author on mathematical models for insurance. According to the author it almost goes without saying that the ever growing number of models applicable to the selection of an investment portfolio, to the control of the quality of clerical operations, and to market analysis also are candidates for application to insurance operations. it is appropriate in any discussion of mathematical model building in insurance to make a standard acknowledgment that models concerning the random risk aspect of the business are relevant to the considerations of only a part of the spectrum of problems that face insurance managers. Even when considering questions involving vital quantitative decisions that are unique to the insurance business, it- is a common actuarial practice to suppress the random nature of benefit costs and premium income and to work exclusively with expected values. For example, the involved asset share computations by which life insurance actuaries check the degree of balance among the components of the price aid benefit structure for the ordinary life insurance product presuppose the precise realization of an elaborate set of assumptions.

In this paper a normative model of social processes for decision making was presented. This model represented a slightly elaborated and refined version of a model presented in Vroom and Yetton. We share the previous authors' view that such models are far from perfect but can serve a useful function in stimulating research which, in time, will be reflected in better models. The latter half of this paper was devoted to questions related to how managers do select decision processes—to the factors which influence the degree to which they share their decision-making power with their subordinates. In pursuing these questions, we also relied heavily on the previous work of Vroom and Yetton by using a set of standardized cases selected in accordance with an experimental design. Each case depicted a leader faced with a problem to solve, and subjects were asked to assume his role and to select from a specified list of decision processes the one they would employ. The major difference from Vroom and Yetton was in the nature of the experimental design used in the construction of the "problem set." Whereas Vroom and Yetton's design utilized 30 "group problems" and five decision processes, the design used here provided for seven decision processes and 24 group and 24 individual problems. This design permitted the additional exploration of relationships between behavior on each kind of problem, and of the consistency of the behavior on the latter with the normative model. [ABSTRACT FROM AUTHOR]

The article presents comments of the authors on the review of their article by Professor C. Horack Hamilton. The paper was based on the analysis of net migration rates in the U.S. in 1950-60 by using multiple regression model. Authors of the article suggest that the usage of terms "variables" and "covariable" to identify the independent variables are common and accepted. It is made clear that the mathematical model, employed in the paper, did not include an independent variable to reflect natural increase as it is suggested by Hamilton. And the two educational variables used in the analysis, median years of schooling by persons 25 years of age and over, the percentage of the population 25 years of age and over completing 4 or more years of high school, are closely related. The computation of the overlapping and net effects of each independent covariate helps in determining the highly correlated variables and eliminating those variables from the model, but the overlapping effects provide no information regarding the nature of interactions which may exist and don't show the response surface of interacting variables.

This paper analyzes three simple search models, in which a buyer with full knowledge of the distribution of market prices searches for a low price. He continues his search until the cost of further search exceeds the expected savings resulting from the further search. The implications of these models are also discussed. [ABSTRACT FROM AUTHOR]

The article presents information on the use of models as a valuable adjunct to learning and participating in the scientific enterprise. The American Association for the Advancement of Science (AAAS) has proposed the concept of models at the elementary level, integrating steps in learning the scientific approach. According to the AAAS the activity of model formulation should help to give the student a real "feel" for the potentialities and satisfactions of the scientific approach. According to the educator R.D. Anderson, a "mental model" is a theoretical form or structure which is hypothesized on the basis of observations of natural phenomena. The Physical Science Study Committee has described models as ideas, pictures, systems of concepts which describe the things one investigate. The construction of a physical or mathematical models is the creative heart of all science. A paper "The Scientific Approach to Knowledge" by the AAAS states that the best way to achieve the generalization and retention of "process" skills is to continue to provide for a kind of "process" emphasis in instruction. Students should be instructed in the scientific approach to the generation of organized knowledge.

The causal relationships in a two variable system are examined, using a simultaneous linear differential equation model. Emphasis is placed on the necessity for considering mutual interaction instead of looking for unidirectional causality. To demonstrate the usefulness of this approach an example is taken from the management science literature concerning the relationship between labour turnover and overtime. It is shown that, on certain assumptions, the data disconfirm a hypothesis previously thought to be confirmed. Certain informal observations made in the original paper were shown to receive confirmation from the data. [ABSTRACT FROM AUTHOR]

The article focuses on some aspects of the performance on non-convertible preferred stocks. It is explained that there have been various discussions that preferred stocks combine some features that are inferior to those of bonds with some features that are inferior to those of common stocks. These discussions suggest that preferred stocks may represent an inferior class of investments relative to bonds and common stocks. The article used the market model from portfolio theory and a multiple regression analysis to investigate the holding period returns to preferred stocks.

The author presents comments on the market model and two-parameter models of capital market equilibrium from W.F. Sharpe and John Lintner. An overview is presented of the Sharpe-Linter model. The author notes that in a previous article he pointed out errors that Sharp and Lintner made in applying conditions on equilibrium expected returns of the two-parameter model, in which returns are generated by the so-called market model. In this article, the author asserts that some of the comments he made were incorrect.

The author considers comments concerning the articles "State of the Finance Field," by J. Fred Weston and "State of the Finance Field: Comment," by Harry Sauvain, both in the December 1967 issue of this publication, about the changing state of the field of finance. The author states that the differences between traditional finance and new finance lies with the effectiveness with which quantitative methods are used, and suggests that new finance appears more interested in mathematical games than solving genuine problems. He mentions three reasons to expect very large errors in short-term corporate basic yields: the shortage of quotations, the question of commissions, and the sensitivity of short-term yields to minor price changes.

The article discusses commercial bank reserve management in a stochastic model and its implications for U.S. monetary policy. The article discusses reserve policies such as holding currencies in case of bank failure and excess reserves in the case of uncertainty of the size of future withdrawals. This article presents a theoretical stochastic model (based on an inventory model) of bank reserves under uncertainty in order to examine the significance of the level of free reserves, the Federal funds market, and a proposal to tie the central bank lending rate to the Treasury bill rate.

The article focuses on the prominence of the money illusion principle within theories of the neutrality of money. It is suggested that while the model functions properly, its necessity within the framework is not absolute. Examination is given regarding the complete removal of money illusion from standard equilibrium-based neutrality theory and its overall effect on the efficiency of the model. The results of the study point to a diminished influence of the money illusion factor of the model, particularly in situations where price-level sensitivity is present.

The article examines the ability of the conventional accounting model to cope with changes in prices. The author discusses the changes of the price level and the consideration of the purchasing power of the monetary unit. The author states that within the article the utility functions are found to imply the same behavior as that specified by the permanent income hypothesis which has been at least partially confirmed by extensive empirical tests carried out by their sponsors. The article also discusses the maximization of the real profit. [ABSTRACT FROM AUTHOR]

The article discusses trading stamps and the problems involved in estimating the liability for unredeemed stamps. A trading stamp company has uniquely designed stamps printed with serial numbers overprinted on each pad and receives batches which consist of 100 pads and 5,000 individual stamps. They distribute pads to their customers and account for the amount, date, serial numbers, customer identification, and other pertinent information for their records during the issuing. When the stamps are redeemed the books are canceled, usually through the mechanical perforation of the books. The perforated books are counted, the count recorded, and then those canceled books are sent to an accumulation center to be completely destroyed.

While high premiums have made most purchasers of insurance cost conscious, little attention has been paid to the real cost of protection and the advisability of remitting the premium in multiple payments. Multiple payments have a major advantage over single premium payments in that the insured has the use of productive funds for a longer period of time. Offsetting this advantage, however, are the insured's additional handling costs and the premium surcharges associated with multiple payments. Tiffs paper develops a model which enables the policyholder to select that number of payments which will minimize his total real insurance costs. It explores the theoretical aspects of developing such a model as well as investigating its empirical applications. [ABSTRACT FROM AUTHOR]

Although the value of mathematical modeling as an aid to corporate planning and problem solving is recognized, few life insurance companies have successfully developed such models to date. This paper presents a justification for the use of modeling and suggests a game plan for the phased development of a life insurance company corporate model. Preparatory activities necessary to insure a successful modeling effort are also discussed. [ABSTRACT FROM AUTHOR]

Very little work has been done in developing a systematic and exhaustive set of criteria which can be used for assessing model validity from a managerial standpoint. Most of the other published work in this area focuses on an individual criterion, such as sensitivity analysis. This manuscript offers a set of criteria making that assessment. The following three basic kinds of validity are proposed: (1) technical validity; (2) operational validity; and (3) dynamic validity. Each has a number of subcriteria which are identified and discussed. Some of these criteria are quantifiable, and some are not. Each of the criterion identified is discussed in relatively broad terms, with brief examples. One of the purposes of this paper is to draw attention to an area worthy of further investigation. Perhaps further scrutiny will generate a truly systematic and exhaustive set of criteria. It is also hoped that further attention will lead to clarification of the criteria identified. [ABSTRACT FROM AUTHOR]

In this paper we have discussed some of the factors to consider when making trade-offs. We have provided the description (and a program listing, in the appendix) for an interactive computer program (ICM) for obtaining indifference curves, using an extension of the MacCrimmon/Toda method. Some results have been presented to indicate that the procedure produces preference representations that correspond surprisingly well with subsequent choices. [ABSTRACT FROM AUTHOR]

In this paper, the author suggests a methodology for facilitating interactive decision making in a decentralized organization by providing information which may result in the transfer of divisional resources. The resource-transfer information is generated at the beginning of the planning period so that the organization's production control and evaluation systems may be formalized. [ABSTRACT FROM AUTHOR]

Recent efforts by several authors have resulted in the development of techniques for analytically describing the dynamic properties of linear stochastic difference equation models. Since these techniques have not been extensively applied to econometric models and consequently are not generally familiar to economic modelers, the purpose of this paper is to summarize the techniques these researchers have developed and to illustrate them using a simple (and admittedly unrealistic) econometric model. [ABSTRACT FROM AUTHOR]

The paper illustrates the desirability and feasibility of the computer simulation technique in socio-psychological research. A computer simulation model of a five-man industrial work group is constructed. After the model has successfully passed a two stage validation procedure, an experimentation phase is conducted. In a 2 × 3 replicated factorial experiment, five years of simulated weekly data is used to test several hypotheses which relate the independent variables—supervisory style and worker interpersonal orientation—to productivity, worker job satisfaction and group cohesiveness. The hypotheses were derived from the findings of prior short-lived laboratory and field research. The study indicates that the computer simulation approach is a valuable adjunct to the classical organizational research techniques. [ABSTRACT FROM AUTHOR]

The article presents an experiment with two-gradient models for the problem of non-linearity in ordination. This paper focuses on the environmental factors in relation to the species performance. Information on the optimum and decline to zero for high and low levels are discussed. An ecological assumption implication for ordination methods assuming monotonicity and frequent linearity is presented. Models representing environmental space in two factors are given. The experiment's results is briefly discussed.

This paper presents a new version of the factor-price equalization theorem. The numbers of outputs and of factor inputs are allowed to be unmatched. The domestic factor prices in a country facing the international commodity prices are uniquely determined in the neoclassical framework once the factor endowment is taken as given. This allows the factor-price equalization proposition to maintain the invariance of the derivatives of the social production possibility schedule with respect to input parameter perturbations, considering the possible repercussions in the outputs. A necessary and sufficient condition for this invariance is presented in terms of second derivatives of the social production possibility frontier with its economic interpretation. This condition is applied to the non-joint production case. The paper asserts that the equalization theorem holds true if the constant-returns to scale production functions are strictly concave except along rays and satisfy the full-rank condition on the input-coefficient matrix, and if the number of commodities is no less than that of factors. Several other varieties are also presented including the joint production case. [ABSTRACT FROM AUTHOR]

The article comments on a paper by Shirley Almon in "Econometrica" about the distributed lag between capital appropriations and expenditures. It reports the results of some experiments conducted using the National Industrial Conference Board's series on capital appropriations and expenditures of manufacturers. It is the same body of data used by Almon in her paper that demonstrated the use of an elegant distributed lag incorporating fixed coefficients. The model used in the experiments incorporates a variable lag between appropriations and expenditures. The model was used to examine the relationship between orders and shipments of machinery and equipment industries.

In this paper, we consider two basic aspects of demand analysis, with application to the demand for natural gas in the residential and commercial market. The more fundamental one consists in the formulation of a demand function for commodities—such as natural gas—whose consumption is technologically related to the stock of appliances. We believe that in such markets, the behavior of the consumer can be described best in terms of a dynamic mechanism. Related to this is the more specific problem of estimating the parameters of the demand function, when the demand model is cast in dynamic terms and when observations are drawn from a time series of cross sections. Accordingly, this paper is centered around these two major themes, although, as the title suggests, the emphasis is placed on the second one. In Section 1, we present the theoretical formulation of the dynamic model for gas. In Section 2, the results of the estimation of the gas model by ordinary least squares methods are presented. These results, together with more fundamental theoretical considerations, suggest a different approach. The essence of this approach, which is not restricted to the gas model, is discussed in Section 3, while two alternative procedures for estimating the coefficients of the dynamic model in the light of this new approach are proposed in Section 4. It is subsequently shown that the application of these procedures to the gas data produces results that are reasonable on the basis of a priori theoretical considerations. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to describe a new gradient method for maximizing general functions. After a brief discussion of various known gradient methods the mathematical foundation is laid for the new algorithm which rests on maximizing a quadratic approximation to the function on a suitably chosen spherical region. The method requires no assumptions about the concavity of the function to be maximized and automatically modifies the step size in the light of the success of the quadratic approximation to the function. The paper further discusses some practical problems of implementing the algorithm and presents recent computational experience with it. [ABSTRACT FROM AUTHOR]

The article discusses a relatively new method of quantitative analysis called game theory, applied to a problem in insurance consumption. It is obvious that the development of a rational worry factor will not be an easy task and that it is too early to expect a complete development in this paper. The authors propose that the worry factor be related to the chance the individual is willing to take that the losses during any policy period equal or exceed the premium. There had been enough preparation to make an initial proposal which makes some sense under the assumptions specified earlier.

In most econometrics courses the students are given limited exposure to the empirical applications of econometric theory. The use of canned programs would make it possible to cover more applied econometric work, and help prepare the students for more empirical work. The computer can be a valuable teaching aid for both instructor and student. The students will also gain valuable experience in the area of computer assisted data analysis. This paper discusses many of the programs appropriate for use in econometrics courses. Examples of problems using programs, and several alternative outlines of possible courses in applied econometrics are presented. [ABSTRACT FROM AUTHOR]

This paper describes a comprehensive simulation modeling approach to the problem of locating warehousing facilities in a fashion that minimizes the cost associated with operating a multi-product, multi-source, multi-destination distribution system. The digital simulation model presented in the study is derived within an "industrial dynamics" framework, utilizes input from an existing management information system, and employs a number of relatively simple heuristic procedures to analyze various alternative warehousing networks. Simulation results, in terms of the distribution costs associated with various warehouse locations, are presented for cases involving the effect of provision of a 100% service level, the effect of constraining product availability and/or inventory capacities at various warehouses, and the effect of deleting various warehouses from the existing warehouse network. [ABSTRACT FROM AUTHOR]

This paper presents a model for explaining preference among similar alternatives. Preference is hypothesized to be governed by the relative position of the alternatives on specific dimensions (attributes). More specifically, preference is stated to be related to the distance of an alternative from an ideal alternative. A summary of a test of the model is presented. Next, a probabilistic form of the model is obtained assuming that the measured distance is affected both by individual uncertainty and measurement error. For a particular case, the resulting normality of the distribution is demonstrated. This introduction of a random element into the model is seen to be a major advance, although final judgment must await extensive testing. [ABSTRACT FROM AUTHOR]

This paper extends the analysis of the multi-item inventory systems with amalgamation of orders to the case where there is more than one possible supplier. The problem is to assign each inventory item to an order period and a supplier such that the total inventory costs are minimized. The model is formulated as an integer programming problem which can be solved by standard linear programming techniques. In addition to providing the framework for selecting the supplier for an item, the model can include different ordering and review costs, price differentials between suppliers, quantity discounts, inventory constraints and ordering constraints. Numerical examples illustrating the use of the model are provided. [ABSTRACT FROM AUTHOR]

Economic planning can in principle be seen as consisting of two phases: first a description of all possible development paths, and second a choice of “the best one” from among these possibilities. In the present paper the measurement of real capital is discussed in relation to the needs of the first of these two phases. In section 2 of the paper it is argued that the most relevant measure of capital for this purpose is the gross value of the existing capital stock, i.e. the total value without accounting for depreciation. In section 3 of the paper different ways of estimating this gross capital stock are discussed. In sections 4, 5 and 6 there follows a discussion of how one can correct the capital measures for changes in efficiency with age, for “embodied technical progress” and for different durabilities. The latter correction leads to concepts which are equivalent to measuring “capital services” as a factor of production. The treatment of maintenance and repair will be important for the interpretations of some of these “corrections.” The final section of the paper suggests a model which requires data on vintages of capital. [ABSTRACT FROM AUTHOR]

SUMMARY In this paper an effort is made to pull together different strands of thinking on the subject of portfolio selection in recent literature. In order to make explicit relationships which are difficult to state verbally a simple model is set up which accounts for a number of factors influencing portfolio selection. The model is a certainty-equivalence type model as developed by T obin and by M arkowitz. With its aide it is possible to indicate the general directions of shifts in portfolio composition if there are changes in the market rate of interest (effect stressed by the so-called 'New Theory of Credit Control'), a change in the yield differential between á low-yield, low-risk security and a high-yield, high-risk security (effect investigated by W arren L. S mith), a change in risk aversion (effect investigated by D. E. F arrar and others) and a change in total loanable funds available (effect investigated by B. G. M alkiel and J. K ane). In addition, the effect of a proportionate income tax with and without loss-offset provisions on portfolio composition is shown. [ABSTRACT FROM AUTHOR]

SUMMARY Educational planners and administrators face the problems of distributing re-sources between general and vocational education. A model is presented to help them in this decision. The main differences between general and vocational education is the probability of its being put to practical use. In the particular case where vocational education is the preparation for a specific job, the probability that it will be used is equal to one. The probability that the subjects taught in general education will be used is less than one. Thus, to compare the yields of general and vocational education the expected values of their yields should be used. The yields of general and vocational education are not the only factors that should be considered in distributing resources among them. The influence of the cost of the two types of education and the resources available should also be included. The expected yields, the costs and resources available for education are put together in a linear programming problem. The solution of the problem indicates that resources should be spent on the type of education that yields more per unit of cost. To avoid some of the limitations of the linear problem, a quadratic version is also considered. The main direction for progress suggested by the paper is in the recompilation of quantitative data on the yields, and costs of the two types of education, as well as for the probabilities of their use. Additional research on the probability distribution of the use of subjects taught in the schools is also suggested. [ABSTRACT FROM AUTHOR]

The article presents an account of wage and salary administration and wage theory. Many industrial wage and salary administrators believe that they can determine wage and employment levels for their firms by use of criteria different from those of economic wage theory. Industrial programs differ from the approach of marginal theory mainly in their failure to employ the economic criterion of value productivity of labor. This paper will contend that revenue (or value) productivity does, nevertheless, dominate the activities of operating firms with respect to wage rates and employment levels. Therefore, it will be argued, wage theory describes more fully the forces affecting firm decisions than does wage and salary administration analysis. The operating firm and the firm in the economic model determine the magnitudes in similar ways if allowances are made for the restrictions placed upon the businessman by lack of data, presence of frictions, and the like. This similarity of solutions is not always apparent, however, because functions which are combined in a single process in the economic model are scattered among a number of administrators in the medium-or large-sized firm.

The article offers discussion about a report concerning the development of economic models that will determine the optimal investment in plants and equipment, and the present value of its profits under conditions of certainty when the ability to borrow is open. This model insists upon evaluating the cost of all options in order to determine the most efficient option. The author compares this theory with the traditional theory of economics which includes the traditional cost curves of microeconomic theory.

The article discusses an article by economist Alan Greenspan called "Liquidity as a Determinant of Industrial Prices and Interest Rates" that appears in this journal. The author discusses the variables of the quantity theory of money that Greenspan uses in his original article, particularly a mathematical model that includes factors like money supply and real income. The article concludes that while Greenspan is correct in stressing the need for consistency when making economic forecasts, his method for creating long run forecasts is still too short.

In this paper I present a model of exchange-rate equilibrium that incorporates the purchasing-power-parity and factor-price-equalization theories along the lines suggested by HOUTHAKKER's earlier work. I also provide a test of how well this model predicts real-world behavior. The model is outlined in Section I and its implications for computing purchasing power parity examined in Section II. Then in Section III BALASSA's econometric test of the model is shown to be inapplicable, and an alternative test is presented in Section IV. Some concluding remarks in support of the theory are offered in Section V. [ABSTRACT FROM AUTHOR]

This article develops a model which describes the expected costs of adopting an insurance program which has a deductible feature. Rules for choosing the least expected cost deductible level are developed for policies with aggregate deductibles and for those with straight deductibles. Also, it is noted that the decision maker may not want to move from a smaller deductible to a lower cost larger one if the expected cost benefits are small and the risk assumption is large. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to give a systematic account of the significance that antagonism among opinions of individuals has on the theory of social choice. We define an "intensity" of antagonism among individuals and an index of "possibility" of constructing social welfare functions, and show that when there is less antagonism in a society, then there is more "possibility" of constructing social welfare functions. Since antagonism is an opposite concept to similarity, this relation can be viewed as a formal realization of Arrow's assertion [1, Ch. 7] that sets preference similarity as the basis of social welfare judgement. [ABSTRACT FROM AUTHOR]