Free entry equilibria are usually characterized by the zero profit condition. We plead instead for a strict application of the Nash equilibrium concept to a symmetric simultaneous game played by actual and potential entrants, producing under decreasing average cost. Equilibrium is then typically indeterminate, with a number of active firms varying between an upper bound imposed by profitability...

This experiment investigates the social preferences and choices of economists and physicians for treating patients and compares the choices with those in a congruent neutrally framed allocation problem. The potential recipients differ with respect to their minimum needs as well as to their ability to profit from the receipt. Using the theoretical solutions, we classify the distributors as selfi...

Since its first formulation in 1962, the Alternating Current Optimal Power Flow (ACOPF) problem has been one of most important optimization problems electric power systems. Its common interpretation is a minimization generation costs subject to network flows, generator capacity constraints, line and bus voltage constraints. The main theoretical barrier solution that ACOPF non-convex consequentl...

This lecture discusses the problem of allocating ad slots given search queries, where the advertisers have constrained budgets, and the search queries arrive online. An online algorithm is tasked with allocating each term to an advertiser, with the aim of maximizing the overall revenue, subject to the budget constraints. The main result described is an online algorithm that, for a random permut...

Computing utilities are emerging as an important part of the infrastructure for outsourcing computer services. One of the major objectives of computing utilities is to maximize their net profit while maintaining customer loyalty in accordance with the service level agreements (SLAs). Defining the SLAs conservatively might be one easy way to achieve SLA compliance, but this results in underutili...

This paper is concerned with the situation in which a profit-maximizing monopolist faces consumers that are diverse not only in their preferences but also in their levels of bounded rationality. The behavioral phenomenon considered here is the attraction effect when choices are made across categories. Using the standard second-degree price discrimination model, the optimal menu of contracts tha...

Botnets have become an increasing security concern in today’s Internet. Thus far the mitigation to botnet attacks is a never ending arms race focusing on technical approaches. In this paper, we model botnet-related cybercrimes as a result of profit-maximizing decision-making from the perspectives of both botnet masters and renters/attackers. From this economic model, we can understand the effec...

summary This study provides a model-based approach for implementing retail category management with a focus on markup decisions. We develop a reduced form Bayesian econometric model that captures price and sales variation for a retail chain. Based on this model, we derive the optimal retail markups on individual brands within a product category by maximizing the total category profit over a fin...

This paper presents a biased random-key genetic algorithm for solving a multi-objective optimization problem concerning the management of agile Earth observing satellites. It addresses the selection and scheduling of a subset of photographs from a set of candidates in order to optimize two objectives: maximizing the total profit, and ensuring fairness among users by minimizing the maximum profi...