Equity weights in the allocation of health care: the rank-dependent QALY model

This paper introduces the rank-dependent quality-adjusted life-years (QALY) model, a new method to aggregate QALYs in economic evaluations of health care. The rank-dependent QALY model permits the formalization of influential concepts of equity in the allocation of health care, such as the fair innings approach, and it includes as special cases many of the social welfare functions that have been proposed in the literature. An important advantage of the rank-dependent QALY model is that it offers a straightforward procedure to estimate equity weights for QALYs. We characterize the rank-dependent QALY model and argue that its central condition has normative appeal. (C) 2003 Elsevier B.V. All rights reserved.

Application of the cross-entropy method to the buffer allocation problem in a simulation-based environment

The buffer allocation problem (BAP) is a well-known difficult problem in the design of production lines. We present a stochastic algorithm for solving the BAP, based on the cross-entropy method, a new paradigm for stochastic optimization. The algorithm involves the following iterative steps: (a) the generation of buffer allocations according to a certain random mechanism, followed by (b) the modification of this mechanism on the basis of cross-entropy minimization. Through various numerical experiments we demonstrate the efficiency of the proposed algorithm and show that the method can quickly generate (near-)optimal buffer allocations for fairly large production lines.

Benefits of all work and no play: The relationship between neuroticism and performance as a function of resource allocation

The authors evaluate a model suggesting that the performance of highly neurotic individuals, relative to their stable counterparts, is more strongly influenced by factors relating to the allocation of attentional resources. First, an air traffic control simulation was used to examine the interaction between effort intensity and scores on the Anxiety subscale of Eysenck Personality Profiler Neuroticism in the prediction of task performance. Overall effort intensity enhanced performance for highly anxious individuals more so than for individuals with low anxiety. Second, a longitudinal field study was used to examine the interaction between office busyness and Eysenck Personality Inventory Neuroticism in the prediction of telesales performance. Changes in office busyness were associated with greater performance improvements for highly neurotic individuals compared with less neurotic individuals. These studies suggest that highly neurotic individuals outperform their stable counterparts in a busy work environment or if they are expending a high level of effort.

The risk premium for equity: implications for resource allocation, welfare and policy

Analysis of the equity premium puzzle has focused on private sector capital markets. The object of this paper is to consider the welfare and policy implications of each of the broad classes of explanations of the equity premium puzzle. As would be expected, the greater the deviation from the first-best outcome implied by a given explanation of the equity premium puzzle, the more interventionist are the implied policy conclusions. Nevertheless, even explanations of the equity premium puzzle consistent with a general consumption-based asset pricing model have important welfare and policy implications.