PARTICIPATIVE BUDGETING UNDER UNCERTAINTY: A DECISION-THEORETIC APPROACH

ORGANIZATIONAL BUDGETING PROBLEMS DEALING WITH SEVERAL DECISION-MAKERS ARE CONSIDERED. WHENEVER THERE IS PARTIAL AGREEMENT ON THE ACTIVITIES UNDER CONSIDERATION, A BASIS EXISTS FOR A CONSIDERABLE REDUCTION AND DIVISION OF LABOR IN THE BUDGETING EFFORT. USING A DECISION-THEORETIC APPROACH, A SCHEME IS PROPOSED THAT OFFERS THE OPPORTUNITY TO UTILIZE THE ORGANIZATION'S BEST TALENTS IN EACH AREA, WITHOUT RUNNING MUCH RISK THAT CHEATING WILL APPEAR WORTHWHILE TO ANY INDIVIDUAL. ESSENTIALLY, REQUIRED VALUES AND LIKELIHOODS ARE OBTAINED FROM SPECIALISTS WHILE ALL CALCULATIONS AND CERTAIN 'CHEATING-PREVENTIVE' RANDOM CHOICES ARE LEFT TO A COMPUTER. IN A SPECIAL CASE, IT IS PROVED THAT EVERY CHEATING STRATEGY HAS A POSITIVE PROBABILITY OF BACKFIRING. THE METHOD ALSO FACILITATES THE DETERMINATION OF THE SIZE OF THE TOTAL BUDGET THAT SHOULD BE ADOPTED. /AUTHOR/

  • Supplemental Notes:
    • REP NO P-4496
  • Corporate Authors:

    RAND Corporation

    1776 Main Street, P.O. Box 2138
    Santa Monica, CA  USA  90407-2138
  • Authors:
    • Hakansson, N H
  • Publication Date: 1971-2

Media Info

  • Pagination: 70 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00202241
  • Record Type: Publication
  • Source Agency: National Technical Information Service
  • Report/Paper Numbers: No P-4496
  • Files: TRIS
  • Created Date: Jun 25 1973 12:00AM