Philip J. Mizzi

THE HARMONIC CONSISTENCY INDEX FOR THE ANALYTIC HIERARCHY PROCESS

A new consistency measure, the harmonic consistency index, is obtained for any positive reciprocal matrix in the analytic hierarchy process. We show how this index varies with changes in any matrix element. A tight upper bound is provided for this new consistency measure when the entries of matrix are at most 9, as is often recommended. Using simulation, the harmonic consistency index is shown to give numerical values similar to the standard consistency index but it is easier to compute and interpret. In addition, new properties of the column sums of reciprocal matrices are obtained.

A stochastic dominance analysis of ranked voting systems with scoring

Abstract Selection procedures and elections often use a ranked voting system combined with a set of point values assigned to the various ranks. The winner is the one with the highest total points. However, the choice of the set of point values tends to be arbitrary. Stochastic dominance will be used to define a partial ordering of candidates in this situation. This shows the effect of choosing different point values and, in particular, determines all possible orderings of the candidates. Examples from sports competitions will be used.

Pull-down versus traditional menu types: An empirical comparison

An experiment was conducted to test the performance of pull-down versus traditional or explicit menus. Sixty subjects, including novice and experienced computer users, manipulated both types of menus to complete banking tasks similar to those found on Automatic Teller M achines. The order of the menus was randomly varied to control for learning effects. Across both types of users, traditional-style menus elicited fewer errors than did pull-down menus; however, no significant difference was found in the time to complete the banking task. Experienced users outperformed novice users in the amount of time taken to complete the task regardless of menu type, though no difference was found in the number of errors committed by both user types.

The nickel industry: Continued response to a changing environment

Abstract The world nickel market has slowly evolved from domination by the International Nickel Company (Inco) into a competitive structure. Presently, the nickel industry is characterized by product surpluses and low prices. The change in structure and the current state of the industry has resulted from the price strategy followed by the leading nickel producers, a general decline in market development expenditures, certain characteristics of developing nickel producing capacity and several unforeseen events. Examination of these factors can help in developing policy options aimed at improving the future of the industry.

Capital Adjustment Costs: A Nonrenewable Resource Industry*

The exploitation of a nonrenewable resource by a monopolist or by competitive firms has been studied extensively since Hotelling [2]. One focal point has been the investigation of markets characterized by a cartel competing with a group of smaller firms, as in the oil industry. Salant [7] and Gilbert [1] conclude that the OPEC cartel will increase its market share and attain monopoly status. The industrys history from 1980 through 1986, however, suggests that this is not the case. The price set by the cartel has encouraged expansion by other firms, pushing OPEC to the point of near collapse. Further, the structure of the nickel and other resource industries has changed from monopoly into competition. The fact that existing models fail to track observed trends in market structure implies that important economic elements have been omitted from the analysis. As the present study will show, including limitations on the ability of firms to expand production quickly yields a more general model of the evolution of market structure.

An analysis of exotic wagers in a parimutuel setting

In US horse racing, there is increasing emphasis placed on the creation of exotic wagers - those bets beyond the standard win, place and show. Bets on multiple races that typically do not result in a winner for several days are of particular interest to the industry. The growing carryover pool helps attract people to the racetrack in a way similar to a growing carryover in the lottery attracts more people to participate. This article examines several multiple race bets and provides a framework for their comparative analysis. The results of the analysis will help racetrack management decide if a proposed bet is appropriate for their particular track. This analysis shows a tradeoff between the difficulty of winning the bet versus the amount of the ultimate payoff. If a bet is too easy to win, then the carryover pool will never reach an attractive level. If the bet is too difficult to win, then the bettors will lose interest before the carryover pool is able to grow sufficiently large. The amount of money wagered daily is an important consideration in determining the appropriate type of exotic wager to implement.

A stochastic dominance comparison of truncated normal distributions

Abstract A characterization of first and second order stochastic dominance rules is given for the comparison of two truncated normal distributions. Two types of truncation are considered: equal areas in each tail for both distributions or both distributions truncated at the same value on the left tail. A transformation of the normal distributions makes it possible to display the results graphically. The results can be used to compare the possible returns on investments with limited liability.

Consumer demand with variable preferences in taiwan: an application of the generalized Fechner-Thurstone direct utility function

Abstract Time series data on five consumer commodity groups for Taiwan are analyzed using the generalized Fechner-Thurstone direct utility function. Income and price-demand elasticities are derived from unconstrained maximum likelihood estimates of the constant elasticities of marginal rates of substitutions. The elasticities are similar to those obtained for Taiwan using a translog indirect utility function. However, the estimates obtained for Taiwan are significantly different from those reported by other researchers for South Korea and the United States which serves as an indication of differences in the stages of economic development between the economies.

Estimation of the degree of market inefficiency in place and show betting at the racetrack

Ziemba and Hausch have studied place and show betting at the racetrack and shown the occasional presence of positive expectation wagers. The technique uses information present at the racetrack (the amounts bet to win, place, and show on each horse) but not otherwise available. This paper examines data on past races and derives bounds on the percentages bet to win, place, and show for each of the first three finishing horses. Bounds on the estimated expected profit of Ziemba and Hausch (prior to the race) for a given bet is obtained. An example of the procedure is provided using past race results.

Estimating the true cost of living for households with different incomes using data from Taiwan

This empirical study investigates why the true costs of living for different income groups in Taiwan as measured by the superlative Törnqvist price index have grown dissimilarly over the sample period. Specifically, it shows that using the aggregate Cost of Living (COL) estimates for the entire households as is commonly practiced would produce noticeable group bias effect in measurement. Also the magnitude of the commodity substitution bias in the conventional Consumer Price Index (CPI) is found to be positively related to household income in general. Because of the presence of these two biases, the true COL for households belonging to the two ends of the income spectrum is found to be over-estimated. This article is therefore in full agreement with Arrows proposition that an alternative and separate set of price index be constructed.