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The term satisficing, a portmanteau of satisfy and suffice, [2] was introduced by Herbert A. Simon in 1956, [3] [4] although the concept was first posited in his 1947 book Administrative Behavior. [5] [6] Simon used satisficing to explain the behavior of decision makers under circumstances in which an optimal solution cannot be determined. He ...
Examples of alternatives to utility maximisation due to bounded rationality are; satisficing, elimination by aspects and the mental accounting heuristic. The satisficing heuristic is when a consumer defines an aspiration level and looks until they find an option that satisfies this, they will deem this option good enough and stop looking. [7]
Information theory is useful to calculate the smallest amount of information required to convey a message, as in data compression. For example, consider the transmission of sequences comprising the 4 characters 'A', 'B', 'C', and 'D' over a binary channel.
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An optimal decision is a decision that leads to at least as good a known or expected outcome as all other available decision options. It is an important concept in decision theory.
How to calculate the current ratio. You can calculate the current ratio by dividing a company’s total current assets by its total current liabilities. Again, current assets are resources that ...
The number of times a business sells and replaces its stock over a given time period is its inventory turnover ratio. The inventory turnover ratio, also sometimes called stock turns or inventory ...
Each of the two competing models, the null model and the alternative model, is separately fitted to the data and the log-likelihood recorded. The test statistic (often denoted by D) is twice the log of the likelihoods ratio, i.e., it is twice the difference in the log-likelihoods: