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Verfahrenswahl bei Risiko


Göx, Robert; Dürr, Oliver; Heller, Uwe (2008). Verfahrenswahl bei Risiko. Zeitschrift für Betriebswirtschaft, 78(7-8):813-832.

Abstract

This paper analyzes the choice among alternative fixed and variable cost structures under demand uncertainty. We show that the standard decision rules for the choice among cost structures under certainty continue to hold if the decision maker is risk neutral. If the decision maker is risk averse, the optimal cost structure depends on the decision model. With cost-based decision making, the break even quantities are lower than under certainty. If the decision is based on contribution margins, the opposite holds. That is, a cost structure with higher fixed and lower variable cost becomes attractive for a lower (higher) quantity than under certainty if the decision maker is risk averse and makes his decision on the basis of cost (contribution margin). We also show that cost structures that are dominated under certainty can become attractive for a risk averse decision maker. Finally, we provide a simple agency model and show that the choice among different cost structures can not be separated from the optimal solution of the agency problem even if the principal is risk neutral. More generally, our results suggest that a simple comparison of cost functions is usually not sufficient for an optimal choice between cost structures under uncertainty.

Abstract

This paper analyzes the choice among alternative fixed and variable cost structures under demand uncertainty. We show that the standard decision rules for the choice among cost structures under certainty continue to hold if the decision maker is risk neutral. If the decision maker is risk averse, the optimal cost structure depends on the decision model. With cost-based decision making, the break even quantities are lower than under certainty. If the decision is based on contribution margins, the opposite holds. That is, a cost structure with higher fixed and lower variable cost becomes attractive for a lower (higher) quantity than under certainty if the decision maker is risk averse and makes his decision on the basis of cost (contribution margin). We also show that cost structures that are dominated under certainty can become attractive for a risk averse decision maker. Finally, we provide a simple agency model and show that the choice among different cost structures can not be separated from the optimal solution of the agency problem even if the principal is risk neutral. More generally, our results suggest that a simple comparison of cost functions is usually not sufficient for an optimal choice between cost structures under uncertainty.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:German
Date:2008
Deposited On:27 Jun 2013 09:30
Last Modified:05 Apr 2016 16:50
Publisher:Springer
ISSN:0044-2372
Publisher DOI:https://doi.org/10.1007/s11573-008-0046-7
Other Identification Number:merlin-id:8225

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