Consumer Behavior

The article focuses on the author's view on whether consumers can calculate best buys. According to the author, a number of studies have found only a limited incidence of the ability to reason proportionately. Though subjects in these studies were still in their teens, little further development would be probable with their advancement into adulthood. This evidence led to their hypothesis that a significant number of adults would be unable to utilize a proportional reasoning strategy in a simple consumer decision-making context.

This paper considers the solution of Markov decision problems whose parameters can be obtained only via approximating schemes, or where it is computationally preferable to approximate the parameters, rather than employing exact algorithms for their computation. Various models are presented in which this situation occurs. Furthermore, it is shown that a modified value-iteration method may be employed, both for the discounted version and for the undiscounted version of the model, in order to solve the optimality equation and to find optimal policies.

Recent papers have shown that Π∞k = 1 P(k) = limm→∞ (P(m) ... P(1)) exists whenever the sequence of stochastic matrices {P(k)}∞k = 1 exhibits convergence to an aperiodic matrix P with a single subchain (closed, irreducible set of states). We show how the limit matrix depends upon P(1).

For the multi-server queue with Poisson arrivals and general service times we present various approximations for the steady-state probabilities of the queue size. These approximations are computed from numerically stable recursion schemes which can be easily applied in practice. Numerical experience reveals that the approximations are very accurate with errors typically below 5%. For the delay probability the various approximations result either into the widely used Erlang delay probability or into a new approximation which improves in many cases the Erlang delay probability approximation.

We examine the relative effects of several service order disciplines on important operating characteristics of queues in which customers request a random number of servers. This class of queues is characterized by customers who cannot begin service until all required servers are available. We show that for many systems in this class, it is possible to define a new service order disciplien which is more efficient than FIFO with respect to one or more measures such as expected waiting time, probability of delay, etc.

ln the framework of possibly incomplete asset markets, we derive observable conditions which are necessary.and sufficient for an agent's demand function to be compatible with the maximization of some monotone, concave, von Neumann-Morgenstern objective function. On the other hand, we demonstrate that, in general, as long as markets are incomplete, it is not possible to infer from the observed asset demand function whether the generating representation of preferences necessarily satisfies monotonicity, risk aversion, or the expected utility hypothesis.

Subjects at four age levels (kindergarten, fourth grade, eighth grade, and college) made preference judgments for a set of consumer products varying on four dimensions. Though product preferences reflected independently assessed dimension ratings, subjects had preferences on more dimensions than they took into account in the product ratings. Not until late adolescence did subjects integrate their preferences on two or more dimensions.