“The formal structure of a decision problem in any area can be put into four parts: ( 1 ) the choice of an objective function denning the relative desirability of different outcomes; (2) specification of the policy alternatives which are available to the agent, or decisionmaker, (3) specification of the model, that is, empirical relations that link the objective function, or the variables that enter into it, with the policy alternatives and possibly other variables; and (4) computational methods for choosing among the policy alternatives that one which performs best as measured by the objective function.”

Source: 1970s-1980s, The Economics of Information (1984), p. 55

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "The formal structure of a decision problem in any area can be put into four parts: ( 1 ) the choice of an objective fun…" by Kenneth Arrow?

Kenneth Arrow37

American economist 1921–2017

Related quotes

“[The decisionmaking role of the firm has progressed from the neoclassical standpoint of profit maximization to sales maximization, utility maximization, and satisficing. From the Operation Research point of view] …the ideal picture is that someone, presumable the firm that hires the operations researcher, hands him, on a silver platter, an objective function. By talking to the engineers, or by looking into a few scientific laws, he determines the policy alternatives available and also the model”

Kenneth Arrow (1921–2017) American economist

Source: 1970s-1980s, The Economics of Information (1984), p. 55 as cited in: Demetri Kantarelis (2008) " Book Review: Title: Theories Of The Firm 2nd Edition http://www.inderscience.com/books/TOF_american_econ_review.pdf". In: The American economist. Vol 52, Nr 1. p. 117

“… a rather different class of applications of the idea of best allocation of scarce resources… usually referred to as the theory of optimal economic growth. In most studies of this kind made in the countries with market economies there is not an identifiable client to whom the findings are submitted as policy recommendations. Nor is there an obvious choice of objective function, such as cost minimization or profit maximization in the studies addressed to individual enterprises. The field has more of a speculative character. The models studied usually contain only a few highly aggregated variables. One considers alternative objective functions that incorporate or emphasize various strands of ethical, political, or social thought. These objectives are then tried out to see what future paths of the economy they imply under equally simplified assumptions of technology or resource availability.”

Tjalling Koopmans (1910–1985) Dutch American economist

Source: Concepts of Optimality and Their Uses, 1975, p. 244

“Construction methods are… variable for each specific material.”

Eduardo Torroja (1899–1961) Spanish architect

p, 125
Philosophy of Structures (1958)

“If the system exhibits a structure which can be represented by a mathematical equivalent, called a mathematical model, and if the objective can be also so quantified, then some computational method may be evolved for choosing the best schedule of actions among alternatives. Such use of mathematical models is termed mathematical programming.”

George Dantzig (1914–2005) American mathematician

Source: Linear programming and extensions (1963), p. 2

“Global rationality, the rationality of neoclassical theory, assumes that the decision maker has a comprehensive, consistent utility function, knows all the alternatives that are available for choice, can compute the expected value of utility associated with each alternative, and chooses the alternative that maximizes expected utility. Bounded rationality, a rationality that is consistent with our knowledge of actual human choice behavior, assumes that the decision maker must search for alternatives, has egregiously incomplete and inaccurate knowledge about the consequences of actions, and chooses actions that are expected to be satisfactory”

Herbert A. Simon (1916–2001) American political scientist, economist, sociologist, and psychologist

attain targets while satisfying constraints
Simon (1997, p. 17); As cited in: Gustavo Barros (2010, p. 460).
1980s and later

“The measure of information to be developed here will also be related to freedom of choice; that is, it will be a function of the probabilities of choice associated with the alternative courses of action… The measure developed here is a function of m, the number of alternative potential courses of action.”

Russell L. Ackoff (1919–2009) Scientist

Source: 1970s, On purposeful systems., 1972, p. 145, as cited in: Galjaard (2009, p. 89): About the information-concept of Ackoff.

“Organizations are (1) social entities that (2) are goal-directed, (3) are designed as deliberately structured and coordinated activity systems, and (4) are linked to the external environment.”

Richard L. Daft (1964) American sociologist

Source: Organization Theory and Design, 2007-2010, p. 10; Cited in: Jan A. P. Hoogervorst (2009), Enterprise Governance and Enterprise Engineering, p. 80.

“The manner in which time and space are bound up with each other in the four-dimensional continuum is variable. It is difficult to express this variability of the cross-connections between space and time in simple language, and different interpretations of it are possible, corresponding to different mathematical transformations of the fundamental line-element, e. g. a different choice of the variable which we interpret as "time." Perhaps the best way we can express it is by saying that the solution of the field-equations of the theory of relativity shows that there is in the universe a tendency to change its scale, which at the present time results in an expansion, but may perhaps at other times become, or have been, a shrinking. This is true of the grand scale model of the universe.”

Willem de Sitter (1872–1934) Dutch cosmologist

Kosmos (1932), Above is Beginning Quote of the Last Chapter: Relativity and Modern Theories of the Universe -->

“Project management is the planning, organizing, directing, and controlling of company resources for a relatively short-term objective that has been established to complete specific goals and objectives. Furthermore, project management utilises the systems approach to management by having functional personnel (the vertical hierarchy) assigned to a specific project”

Harold Kerzner (1940) American engineer, management consultant

the horizontal hierarchy
Source: Project management for executives (1982), p. 3

“A function of a variable quantity is an analytic expression composed in any way whatsoever of the variable quantity and numbers or constant quantities.”

Leonhard Euler (1707–1783) Swiss mathematician

§4
Introduction to the Analysis of the Infinite (1748)

Help us to complete the source, original and additional information

Kenneth Arrow37

Related quotes

Related topics