Analysis Exercises (Due class 3)

Question 1

a) Construct some alternative job offers that you might receive in the next three or four years. Make sure that the offers differ substantially on issues that are important to you. Rank the offers in your order of preference.

b) Construct a multi-attribute value analysis (MAV) that will allow you to evaluate the hypothetical offers. Be sure to include a wide range of possible outcomes on each issue. Rank the alternatives according to your scoring system.

c) Give a brief qualitative description of how your scoring system reflects your interests.

d) Describe how you would use the analysis when responding to your second- and third-ranked offers.

Question 2

Kim, a software programmer, has received the following job offers from four software companies. She prefers to take a job that offers more skill development, fewer travel days, and a high salary. She uses the following decision process: She starts with two jobs, Alon and Bexel, compares them attribute by attribute, and takes the job which is favored on more attributes. She repeats this, working down the list, comparing the previous winner with the new candidate.

Software
Company	Skill development	Travel days	Salary
Alon	low	0	75
Bexel	medium	20	85
Carill	high	10	70
Dravis	medium	5	72

a) Which job does the procedure recommend?

b) Is this a good procedure for evaluating offers? Explain.

c) Compare the strengths and weaknesses of this procedure to an MAV analysis.

Question 3

Georgia and Vincent are a sister and brother negotiating over which sibling will inherit a painting from their parents. The painting is “worth” $100 to Georgia and $5 to Vincent.

a) Identify the pareto efficient outcome(s).

b) Identify the pareto efficient outcome(s) if Georgia and Vincent are allowed to make monetary side payments.

Question 4

Suppose that Union is negotiating with Management. The two parties are negotiating over two benefit issues: health care benefits and Management's contribution to Union's pension fund. For simplicity, assume each issue can take two levels, low and high. Each party has created a scoring system that reflects its preferences for various negotiation outcomes (see the back).

Pension Health Care

Management Union Management Union

High 0 3 High 0 2

Low 10 0 Low 20 0

For example, low pension/low health care is worth 30 points to management, and high pension/high health care is worth 0.

a) Qualitatively describe the preferences of Union and Management.

b) Graph all possible agreements. Identify the Pareto efficient agreement(s). Choose a Pareto inefficient agreement and explain qualitatively why both parties are better off with a different agreement.