Ghanaian manufacturing firms face a highly risky environment. Firms may attempt to manage these risks by undertaking production, input, and investment strategies designed to lower profit variability. Mean-variance analysis implies, however, that these strategies involve a trade-off with lower expected profits. This paper investigates the extent to which more risk averse managers who face high r...

Submitted: Jun 12, 2013; Accepted: Jul 23, 2013; Published: Jul 25, 2013 Abstract: Companies around the world normally assign a portion of their benefits to their employees. This policy is used as an encouragement to increase the motivation of employees. If the profit sharing seems unfair, its expected results will be lost. In this paper, a model is developed to determine a desirable profit sha...

For a set of risky financial securities whose expected return vector and covariance matrix are given, we propose the concept of a robust profit opportunity as an alternative to arbitrage opportunities. We formulate the problem of finding the “most robust” profit opportunity in a single investment period, and show that it can be solved as a convex quadratic programming problem. Furthermore, we d...

Let A be a randomized, unlimited supply, unit demand, single-item auction, which given a bid-vector b ∈ [h], has expected profit E[P (b)]. Aggarwal et al. showed that given A, there exists a deterministic auction which given a bid-vector b, guarantees a profit of E[P (b)]/4 − O(h). In this paper we show that given A, there exists a deterministic auction which given a bid-vector b of length n, g...

This paper evaluates the pricing and ordering policies of a retailer, facing a price-dependent stochastic demand, within a newsvendor framework, under different degrees of risk tolerance and under a variety of optimizing objectives. These are (i) maximizing expected profit, for a retailer who may be risk-seeker, riskaverse or risk neutral; (ii) deriving a maximin strategy of maximizing a minimu...

We study the joint delegation of operating and disclosure choices in a multiprincipal agent setting. We find that joint delegation alters both the incentives to deviate from profit– maximizing operating choices and disclosure policy adoption choices. Incentive weights on revenues are greater for the firm with greater ex ante cost uncertainty, greater expected market size and greater expected pr...

Recently, Lee and Hsu (2011) study the advertising effect on the distribution-free newsboy problem. In one of their results, they show that the optimal expenditure on advertising, the optimal order quantity and the optimal lower bound on the expected profit increase with the advertising effect parameters. Although this result holds in general, it requires additional assumptions. In this note we...

It is assumed that in an n-firm single-product oligopoly without product differentiation the firms face an uncertain price function, which is considered random by the firms. At each time period each firm simultaneously maximizes its expected profit and minimizes the variance of the profit since it wants to receive as high as possible profit with the least possible uncertainty. It is assumed tha...

the theory of efficient breach states that it is socially useful to breach a contract whenever the breach would leave no party worse off, while leaving at least one party better off. in other words, economic analyses of breach are mainly concerned with situations in which breach is pareto-superior, rather than just overall profit-maximizing. in contrast with moral theories that hold that breach...

In this paper, we develop a stochastic approximation algorithm to find good bid price policies for the joint capacity allocation and overbooking problem over an airline network. Our approach is based on visualizing the total expected profit as a function of the bid prices and searching for a good set of bid prices by using the stochastic gradients of the total expected profit function. We show ...