The Effect of Contaminated Customer Expectation on Investment Decisions
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The Effect of Contaminated Customer Expectation on
Investment Decisions
Ing. Štefan Lyócsa, PhD.
Vplyv kontaminovaných očakávaní zákazníkov na investičné rozhodnutie
EU PHF Košice, Katedra Hospodárskej Informatiky a Matematiky
GOAL OF THE PAPER
To define the robustness of an investment plan against customer data contamination
Ing. Štefan Lyócsa, PhD.
PROBLEM INTRODUCTION
• Data contamination
Ing. Štefan Lyócsa, PhD.
extreme
values
unexpected distribution
PROBLEM INTRODUCTION
• Assumption 1 Every investment project`s payoff is linked with customer expectation
Ing. Štefan Lyócsa, PhD.
• Assumption 2 For higher customer expectations it is more difficult to overwhelm these expectations
PROBLEM INTRODUCTIONData about customer expectations:
Ing. Štefan Lyócsa, PhD.
• financial decisions: to make an investment (or not) to abandon an investment to wait with an investment
Assessing the data contamination:• quantitatively & qualitatively
PROBLEM INTRODUCTION
Ing. Štefan Lyócsa, PhD.
High level of uncertaintyIs this data contaminated?
PROBLEM INTRODUCTION
Ing. Štefan Lyócsa, PhD.
true customers
contamination (different customers)
GOAL: To define the robustness of an investment plan against customer data contamination
THE MODEL
performance parameter performance parameter
f (x)
f (x)
time
time
Probably the worst case
time
performance parameter
f (x)
THE MODEL
Expected value of an investment plan conditioned to the decision maker`s expected level of achieved performance parameter i.e. How much Am I expecting to surpass customer expectations?
THE MODEL
Decision maker`s expectations
Project`svalue
Treshold point
Invest if PV>0
Don`t invest if PV>0
Decision to make
RCE
Robustness to Customer Expectations
Treshold point when customer expectations are not contaminated
The worst case scenario, the highest Treshold point, when all the data are contaminated
The best case scenario, the lowest Treshold point, when all the data are contaminated
Robust project
Not Robustproject
The Effect of Contaminated Customer Expectation on
Investment Decisions
Ing. Štefan Lyócsa, PhD.
Vplyv kontaminovaných očakávaní zákazníkov na investičné rozhodnutie
EU PHF Košice, Katedra Hospodárskej Informatiky a Matematiky
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