The Economics of Information and Optimal Stopping Rules

Abstract

In this paper, two different stopping environments were analyzed. The decision process occurring in the first environment is continuous and repetitive like inventory management, process control, and maintenance management. However, the probability mechanism associated with the repetitive process is not known. Frequently, the decision-maker has the option of accumulating information about the probability law. The problem is when to stop collecting information. Statistical decision theory was used to solve this class of problems. In the second type of stopping environment the essence of the decision process is that it eventually terminates. Examples of such processes include house-searching, mate selection, and many kinds of investment decisions.

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Document Details

Document Type
Technical Report
Publication Date
Oct 01, 1964
Accession Number
AD0606968

Entities

People

  • John J. Mccall

Organizations

  • RAND Corporation

Tags

Communities of Interest

  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Acquisition
  • Business Administration
  • Data Processing
  • Data Processing Equipment
  • Decision Theory
  • Economics
  • Failure Mode And Effect Analysis
  • Investments
  • Maintenance
  • Markov Chains
  • Markov Processes
  • Probability
  • Probability Distributions
  • Processing Equipment
  • Random Variables
  • Statistical Decision Theory
  • Stochastic Processes

Readers

  • Statistical inference.
  • Systems Analysis and Design