Statisticians generally consider statistical modeling superior (or at least a useful supplement) to experience-based intuition for estimating the outputs of a complex system. But recent psychological research has led to an enhancement of experience-based intuition known as reference class...

Each of an organization’s many activities transforms inputs into outputs. Managing these activities involves allocating input resources for some activities and assigning output targets for others. Making these decisions is especially difficult in the presence of uncertainty. In practice, many...

Many companies set performance targets for their divisions to decentralize the decision-making process and communicate with outside investors. This paper analyzes the effects of performance targets on the decision-making behavior of the divisions. We introduce the notion of an 'effective utility...