Parametric multi-attribute utility functions for optimal profit under risk constraints

We provide an economic interpretation of the practice consisting in incorporating risk measures as constraints in an expected prospect maximization problem. For what we call the infimum of expectations class of risk measures, we show that if the decision maker (DM) maximizes the expectation of a random prospect under constraint that the risk measure is bounded above, he then behaves as a “generalized expected utility maximizer” in the following sense. The DM exhibits ambiguity with respect to a family of utility functions defined on a larger set of decisions than the original one; he adopts pessimism and performs first a minimization of expected utility over this family, then performs a maximization over a new decisions set. This economic behaviour is called “maxmin under risk” and studied by Maccheroni (Econ Theory 19:823–831, 2002). As an application, we make the link between an expected prospect maximization problem, subject to conditional value-at-risk being less than a threshold value, and a non-expected utility economic formulation involving “loss aversion”-type utility functions.     

Risk and the Five Hard Problems of Cybersecurity

This perspectives article addresses risk in cyber defense and identifies opportunities to incorporate risk analysis principles into the cybersecurity field. The Science of Security (SoS) initiative at the National Security Agency seeks to further and promote interdisciplinary research in cybersecurity. SoS organizes its research into the Five Hard Problems (5HP): (1) scalability and composability; (2) policy‐governed secure collaboration; (3) security‐metrics–driven evaluation, design, development, and deployment; (4) resilient architectures; and (5) understanding and accounting for human behavior. However, a vast majority of the research sponsored by SoS does not consider risk and when it does so, only implicitly. Therefore, we identify opportunities for risk analysis in each hard problem and propose approaches to address these objectives. Such collaborations between risk and cybersecurity researchers will enable growth and insight in both fields, as risk analysts may apply existing methodology in a new realm, while the cybersecurity community benefits from accepted practices for describing, quantifying, working with, and mitigating risk.     

Strategy for a statistical analysis of odour influence on the mammalian olfactory bulb responsiveness

This paper proposes a global strategy for statistical analysis of odour influence on the responsiveness of the mammalian olfactory bulb, the first relay of the olfactory pathway. Experiments were performed on 86 mitral cells recorded in 17 anaesthetized freely breathing rats. Five pure odours and their binary mixture were used. The spontaneous activity and odour-evoked responses of the cells were characterized by their temporal distribution of activity along the respiratory cycle, i.e. by cycle-triggered histograms. Several statistical analyses were performed to describe the influence of binary odour mixtures and, especially, to detect a possible dominance of one component of the mixture.     

On the probabilities of correct or incorrect majority preference relations

While majority cycles may pose a threat to democratic decision making, actual decisions based inadvertently upon an incorrect majority preference relation may be far more expensive to society. We study majority rule both in a statistical sampling and a Bayesian inference framework. Based on any given paired comparison probabilities or ranking probabilities in a population (i.e., culture) of reference, we derive upper and lower bounds on the probability of a correct or incorrect majority social welfare relation in a random sample (with replacement). We also present upper and lower bounds on the probabilities of majority preference relations in the population given a sample, using Bayesian updating. These bounds permit to map quite precisely the entire picture of possible majority preference relations as well as their probabilities. We illustrate our results using survey data. Received: 13 November 2000/Accepted: 19 March 2002 This collaborative work was carried out while Regenwetter was a faculty member at the Fuqua School of Business, Duke University. We thank Fuqua for sponsoring our collaboration and the National Science Foundation for grant SBR-97-30076 to Michel Regenwetter. We are indebted to the editor and the referees, as well as to Jim Adams, Bob Clemen, Bernie Grofman, Bob Nau, Saša Pekeč, Jim Smith and Bob Winkler for helpful comments and suggestions.     

The extent of labour specialization in the extended family: A theoretical and empirical analysis

In this paper we present a simple model of labour supply that is cast within the framework of an extended family. The model emphasizes a Ricardian division of labour whereby the specialization is solely driven by marginal productivity and value of time differentials. The empirical implications of the model are derived and tested using data that was collected in France to study the extent of trade within the family network. We find evidence that the extent of specialization is sensitive to the value of time differentials. Received: 17 May 1995 / Accepted: 20 February 1997     

Personnel planning and information systems

Today the need for long-range planning is seen by most private and public organizations. Therefore growing attention to it is required of management in companies, in public services, in the armed services and in the school and university area. Some parts of the long-range planning problems have been widely discussed and practised. But there are some parts, which have received less attention in the business world. One of the relatively neglected areas, but one of special importance is long-range planning for personnel from the shop-floor up to top-management. This lack is remarkable, as one finds a lot of research and practical work on the use of other operations research planning systems, which cover for example queueing, inventory, production or investment problems. But in no field, is planning ahead more important than in personnel. Company growth and effectiveness depend on it. For unless a business organization has people with skill, imagination and a capacity for leadership, at the right time, its other plans may well be worthless.     

Mapping Swedish Females' Educational Pathways in Terms of Academic Competence and Adjustment Problems

Patterns of academic competence, externalizing problems, and internalizing problems were examined in females from the longitudinal Individual Development and Adaptation (IDA) program in order to understand unexpected patterns of educational attainment and problems in adulthood. Person-oriented methods were used to identify patterns of competence and problems at ages 10, 13, and 43. These patterns were linked across time to reveal expected and unexpected educational pathways from childhood to adulthood. Most later patterns were consistent with earlier patterns of competence and problems. This structural-level stability supported our hypothesis that competence and problems tend to be inversely related and function together over time as integrated systems. We focus on one unexpected educational pathway characterized by individuals whose problems remain low over time despite stable levels of low competence. This unexpected educational pathway was examined further in terms of optimal versus general adjustment consequences in adulthood. Some policy implications of studying individual patterns and pathways are discussed .     

Evaluating situations in child welfare: From tools to workgroups

The assessment in child welfare raises a number of questions. Number of work in this area focuses on the issue of tools. This paper presents an approach based on collective development process, the working team. Four situations have been studied extensively in the context of action research. The analysis focused on the collective working time (meetings) and helps to highlight the influence of organizational framework, the importance of sense of security and ways of proceeding that may limit the quality of evaluations. Improving the quality of assessments cannot rely solely on tools: it also depends on the quality of teamwork.     

Quantifying Riverine and Storm‐Surge Flood Risk by Single‐Family Residence: Application to Texas

The development of catastrophe models in recent years allows for assessment of the flood hazard much more effectively than when the federally run National Flood Insurance Program (NFIP) was created in 1968. We propose and then demonstrate a methodological approach to determine pure premiums based on the entire distribution of possible flood events. We apply hazard, exposure, and vulnerability analyses to a sample of 300,000 single‐family residences in two counties in Texas (Travis and Galveston) using state‐of‐the‐art flood catastrophe models. Even in zones of similar flood risk classification by FEMA there is substantial variation in exposure between coastal and inland flood risk. For instance, homes in the designated moderate‐risk X500/B zones in Galveston are exposed to a flood risk on average 2.5 times greater than residences in X500/B zones in Travis. The results also show very similar average annual loss (corrected for exposure) for a number of residences despite their being in different FEMA flood zones. We also find significant storm‐surge exposure outside of the FEMA designated storm‐surge risk zones. Taken together these findings highlight the importance of a microanalysis of flood exposure. The process of aggregating risk at a flood zone level—as currently undertaken by FEMA—provides a false sense of uniformity. As our analysis indicates, the technology to delineate the flood risks exists today.