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Author:

Wang, Kan-Liang (Wang, Kan-Liang.) | Wang, Yuan (Wang, Yuan.) | Liu, Qing-Shun (Liu, Qing-Shun.)

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Abstract:

Cut-off rules specialized in sequential observation and selection problem. The established cutoff rules decreased the cutoff value for low risk in repetitive applications context. Furthermore, the decreasing of cutoff value can maximize the average profit which cost is reducing the number of observation and enhancing the uncertainty of decision. In this paper, reducing the benchmark is more efficient than decreasing cutoff value in risk aversion. The established cut-off rule had been revised and the results, based on the simulations, indicate that the revised cut-off rule is risk aversion and has better average profit. The prove process that the 20 percent is the approximate optimal proportion bring this paper to a close.

Keyword:

Bounded rationality Cut off rules Heuristic rules Prospect theory Sequential observation

Author Community:

  • [ 1 ] [Wang, Kan-Liang;Wang, Yuan;Liu, Qing-Shun]Management School, Xi'an Jiaotong University, Xi'an 710049, China
  • [ 2 ] [Wang, Yuan]Management School, Xi'an Polytechnic University, Xi'an 710048, China

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Source :

Xitong Gongcheng Lilun yu Shijian/System Engineering Theory and Practice

ISSN: 1000-6788

Year: 2008

Issue: 2

Volume: 28

Page: 74-81

Cited Count:

WoS CC Cited Count: 0

SCOPUS Cited Count:

ESI Highly Cited Papers on the List: 0 Unfold All

WanFang Cited Count:

Chinese Cited Count:

30 Days PV: 10

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