• Option Pricing. An American option allows us to buy or sell an asset at any time up to a specified time, where we make money when the price goes under or over (respectively) a set strike price. Valuing the option requires finding an optimal policy for determining when to exercise the option. • Playing Games. Computer algorithms have been designed to play backgammon, bridge, chess, and recentl...

We explore the implications of risk-based capital requirements, à la Basel, for the conduct of monetary policy. A “bank balance-sheet channel” of monetary policy is identified, which operates through bank capital and influences the bank’s loan decision. Using a dynamic banking model, we endogenize the capital decision and show that banks are likely to hold capital above the regulatory minimum t...

This article is part of a series written for people responsible for making decisions about health policies and programmes and for those who support these decision makers. In this article, we address the issue of decision making in situations in which there is insufficient evidence at hand. Policymakers often have insufficient evidence to know with certainty what the impacts of a health policy o...

We introduce a novel framework for option discovery and learning transfer in complex domains that are represented as object-oriented Markov decision processes (OO-MDPs) [Diuk et al., 2008]. Our framework, Portable Option Discovery (POD), extends existing option discovery methods, and enables transfer across related but different domains by providing an unsupervised method for finding a mapping ...

The high cost of lenient return policies force consumer electronics OEMs to look for ways to recover value from lightly used consumer returns, which constitute a substantial fraction of sales and cannot be re-sold as new products. Refurbishing to remarket or to fulfill warranty claims are the two common disposition options considered to unlock the value in consumer returns, which present the OE...

The abundant natural resources can bring either positive or negative impact to the country’s economy depending on the macroeconomic policies. Mongolia has massive mineral resource dominated by coal, copper, and gold. The Government of Mongolia has started to implement a number of infrastructure projects to decrease the mining project’s cost burden caused from the country’s weak infrastructure. ...

We investigate the economics of coal-to-liquid (CTL) conversion, a polygeneration technology that produces liquid fuels, chemicals, and electricity by coal gasification and Fischer–Tropsch process. CTL is more expensive than extant technologies when producing the same bundle of output. In addition, the significant carbon footprint of CTL may raise environmental concerns. However, as petroleum p...

AIMS To date there has been limited analysis of the economic costs and benefits associated with cannabis legalisation. This study redresses this gap. A cost benefit analysis of two cannabis policy options the status quo (where cannabis use is illegal) and a legalised-regulated option was conducted. METHOD A cost benefit analysis was used to value the costs and benefits of the two policies in ...

The aim of this paper is to develop an optimization model for quality improvement by considering quality investment in rework policies and supply chain profit sharing. To improve product’s quality, the decision of process target and its tolerance is important since it directly affects the defective rate, manufacturing cost, and loss to customer due to the deviation of product from its specifica...

We solve the following three optimal stopping problems for different kinds of options, based on the Black–Scholes model of stock fluctuations. (i) The perpetual lookback American option for the running maximum of the stock price during the life of the option. This problem is more difficult than the closely related one for the Russian option, and we show that for a class of utility functions the...