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Maximization Problem (maximization + problem)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	80%

Selected Abstracts

THE EFFECTS OF UNCERTAINTY ON THE LEVERAGE OF NONFINANCIAL FIRMS

ECONOMIC INQUIRY, Issue 2 2009
CHRISTOPHER F. BAUM
This paper investigates the link between the optimal level of nonfinancial firms' short-term leverage and macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm's value maximization problem that predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel of nonfinancial U.S. firms drawn from the COMPUSTAT quarterly database covering the period 1993,2003. The estimates confirm that as either form of uncertainty increases, firms decrease their levels of short-term leverage. This effect is stronger for macroeconomic uncertainty than for idiosyncratic uncertainty. (JEL C23, D8, D92, G32) [source]

The economic value of technical trading rules: a nonparametric utility-based approach

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 1 2005
Hans Dewachter
Abstract We adapt Brandt's (1999) nonparametric approach to determine the optimal portfolio choice of a risk averse foreign exchange investor who uses moving average trading signals as the information instrument for investment opportunities. Additionally, we assess the economic value of the estimated optimal trading rules based on the investor's preferences. The approach consists of a conditional generalized method of moments (GMM) applied to the conditional Euler optimality conditions. The method presents two main advantages: (i) it avoids ad hoc specifications of statistical models used to explain return predictability; and (ii) it implicitly incorporates all return moments in the investor's expected utility maximization problem. We apply the procedure to different moving average trading rules for the German mark,US dollar exchange rate for the period 1973,2001. We find that technical trading rules are partially recovered and that the estimated optimal trading rules represent a significant economic value for the investor. Copyright © 2005 John Wiley & Sons, Ltd. [source]

Investment in organizational capital

MANAGERIAL AND DECISION ECONOMICS, Issue 2 2007
Orlando Gomes
Organizational capital is a specific form of capital that firms accumulate. It relates to the development of codes, technical languages, practical arrangements about how the work is done and to the creation of an organizational culture. The distinctive feature of this form of capital is the fact that it does not contribute directly to an output result. Instead, it can be thought as creating the correct environment for the human factor to maximize its capability of generating value, that is, organizational capital works as an external effect on the accumulation of the human capital input. Nevertheless, organizational capital is a form of capital and therefore it has an investment process associated with it. The paper considers the process of investment in this form of capital and recognizes that it introduces important changes over the firm's profit maximization problem. The problem gains new features relating to its dynamic nature and a condition that guarantees saddle-path stability can be derived. Copyright © 2007 John Wiley & Sons, Ltd. [source]

Coordinated dynamic control of marketing and production

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 4 2009
Jian Yang
Abstract We study the dynamic profit maximization problem for a firm exercising control on both marketing and production. The firs marketing effort impacts the current-period demand, which in turn affects future demand in a dissipating fashion. Under linear-cost and zero-leadtime assumptions, we show that the firm should follow base-point rules for both marketing and production, whereas trends of the base points reflect a certain complementarity between marketing and production. We obtain comparable results when marketing costs are convex. Our computational study identifies conditions under which simple fixed-marketing-effort and fixed-marketing-target heuristics would perform well. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009 [source]

Ethische Konflikte im Gesundheitswesen

PERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 2006
Hartmut Kliemt
Several policy proposals for achieving the aim of supporting the rule of law by minimal means of public health care provision are explored. A system of assigning limited amounts of guaranteed health care that are provided in competitive processes below market clearing prices is suggested. We are seeking for minimum public health care under the constraint of maintaining the legal order rather than solving a maximization problem. [source]