Since the pioneering work of Gerhard Grüss dating back to 1935, Grüss’s inequality and, more generally, Grüss-type bounds for covariances have fascinated researchers and found numerous applications in areas such as economics, insurance, reliability, and, more generally, decision making...

The prospect theory is one of the most popular decision-making theories. It is based on the S-shaped utility function, unlike the von Neumann and Morgenstern (NM) theory, which is based on the concave utility function. The S-shape brings in mathematical challenges: simple extensions and...

Whether to keep products segregated (e.g., unbundled) or integrate some or all of them (e.g., bundle) has been a problem of profound interest in areas such as portfolio theory in finance, risk capital allocations in insurance, and marketing of consumer products. Such decisions are inherently...

The prospect theory is one of the most popular decision-making theories. It is based on the S-shaped utility function, unlike the von Neumann and Morgenstern (NM) theory, which is based on the concave utility function. The S-shape brings in mathematical challenges: simple extensions and...

Whether to keep products segregated (e.g., unbundled) or integrate some or all of them (e.g., bundle) has been a problem of profound interest in areas such as portfolio theory in finance, risk capital allocations in insurance, and marketing of consumer products. Such decisions are inherently...

According to the recognition heuristic, people infer that an object they recognize has a higher value on a criterion of interest than an object they do not recognize. This model has been analyzed mathematically and conditions for the less-is-more effect -- where recognizing fewer objects...

A large fraction of bank's assets and debts in developing countries are usually denominated in foreign currencies (e.g. US dollars, euros). Therefore, fluctuations of the exchange rate is likely to affect their financial wealth. The equity-asset ratio is a usual measure of bank's financial...

In this note, we answer an open problem proposed in Baucells and Sarin (2010, p. 293) to find the optimal consumption sequence when habit formation dominates satiation in an intertemporal choice framework. We find that if consumers do not abstain from consuming goods then, for certain types of...

In this note, we study a winning strategy in the two envelope game. We assume the player only has partial information of the game. In particular, if the players knows the mean and variance of certain distribution, we show a winning strategy that assures a minimum average gain

Motivated by a real-life situation, we put forward a model and then derive an optimal strategy that maximizes the expected real-estate selling price when one of the only two remaining buyers has already made an offer but the other one is yet to make. Since the seller is not sure whether the...