2. Consider a society with three people (Aretha, Melanie, and Salvador) who use majority rule to decidebetween three levels of defense spending, A, B, and C. Level A is small, level B is moderate, and level Cis large. The voters' preferences are depicted in the table below. Each column shows how the voters rankthe choices.ChoiceFirstSecondThirdArethaABCChoiceFirstSecondThirdVoterMelanieсBAa. Consider all possible pairwise elections: A versus B, B versus C, and C versus A. What is theoutcome of each election? Does it appear, in this case, that majority rule would lead to a stableoutcome on defense spending? If so, what is that choice?b. Now suppose that Melanie's preference ordering changes as depicted in the table below:ArethaABсVoterMelanieсABSalvadorBCAWould majority rule lead to a stable outcome in this case? Why or why not?SalvadorBсA

Answer a: We can look at the preferences of each voter for the two choices being considered to see…

Answered: 2. Consider a society with three people…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Apply the PACED decision-making model to a decision you will need to make about your life after high school. You should: define the problem; complete a PACED grid with at least 3 alternatives and 5 criteria; explain how you define (+), (-), and (x) in your evaluation; explain your final decision.
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Consider a firm run by an “incumbent” manager. Suppose the incumbent manager has the opportunity to invest in one of two different projects, Project 1 or Project 2. The incumbent manager has a higher ability in managing Project 1 rather than Project 2. Also, if theincumbent is fired by shareholders, she is replaced by an “alternative” manager whose ability to manage Project 1 is lower than the incumbent’s ability. Suppose the investment in a project is irreversible, and the shareholders’ choice of the incumbent manager salary (as well as their decision on whether to fire her) is taken afterthe investment is made. Also, assume the incumbent manager has a stake in the firm she runs, but she does not fully control it. Questions:(a) Suppose none of the projects gives the manager a direct utility. According to Shleifer and Vishny (1989), which of the two projects should the incumbent manager choose? What is the economic rationale behind this choice? Explain. (b) Suppose the incumbent…
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It is Spring, 2020. In response to the COVID-19 pandemic, a major worldwidepharmaceutical company is doing some initial development of a vaccine. At thesame time, they are in discussions with some researchers at a university in England.These researchers began work quite some time ago seeking a vaccine for anothervirus, but the same research can be applied to COVID-19.Now the pharmaceutical company must make a decision. They could:(i) Abandon the project.(ii) Develop their own vaccine.(iii) Go into a partnership with the university.Developing their own vaccine would cost (all figures are in USD) 900 million, andwould have a 40% chance of being successful (i.e. taking the vaccine would actuallyprevent infection by the virus). However, it would then need extensive testing tomake sure that there are no (or at worst, few) unintended side effects. Dependingon what is discovered during the development of the vaccine, there’s a 15% chanceof needing extensive testing, and an 85% chance of…
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Decision making is a critical component of any organization's success. It involves assessing alternatives and choosing the best course of action to achieve desired outcomes. Decision tree analysis is a useful tool that can be employed in decision making to help managers choose the best alternative among various options. One case study that illustrates the effectiveness of decision tree analysis in decision making is the implementation of the approach in a software development company called XYZ Inc. The company was facing a significant challenge of whether to continue developing a new software product or to abandon the project due to its high cost and uncertain market potential. The management team decided to use decision tree analysis to evaluate the feasibility of the project and make an informed decision. The first step in implementing decision tree analysis was to identify the decision to be made and the various alternatives. In this case, the decision was whether to continue…
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