Response parameters
In decision theory, reaction parameter (or expectation parameter) is an (economic) variable that can only be influenced indirectly by the decision-maker in the context of his decision by setting his action parameter.
General
After Ragnar Frisch first described the action parameter in 1933, the expectation parameter followed in 1938 by his Swedish colleague Ingvar Svennilson. "Certain values of the action parameters (meaning action parameters) are assigned different possible value combinations of certain expectation parameters expected with greater or lesser probability ". His contribution contains an in-depth treatment of the basic planning problems associated with reaction parameters. The term expectation parameter used by him is, however, fuzzy because data parameters also represent an expected future variable. For him, reaction parameters form a stochastic function of the action parameters. Even Erich Schneider took over in 1964 the term expectation parameters. According to Erich Kosiol , reaction parameters “can only be determined indirectly through one's own actions, as they also depend on the constellation of conditions in and outside the company and describe their reaction to the action parameters ex ante ”.
The distinction between action and expectation parameters is not made uniformly in the specialist literature. In business administration there is sometimes the view that, in addition to action parameters, there is another main group, expectation parameters, which are made up of the subgroups reaction parameters and data parameters. In any case, the expected effect of an action parameter has a causal or final connection with the respective decision. The prevailing opinion in the literature is based on an equal coexistence of action, reaction and data parameters. If an action parameter is used, this automatically results in the occurrence of reaction and data parameters. If decisions can only indirectly contribute to the influence, one speaks of reaction parameters. Response parameters, which together with the data parameters determine the environmental situation and thus the conditions of reality, are understood to be the measures triggered by the respective decision in the groups of people directly or indirectly affected by the decisions. Response parameters are expected quantities that are either action-dependent or action-independent.
Response parameters in companies
Reaction parameters are of particular importance for companies and show themselves in many ways as the likely internal and external effects of one's own decisions. All operational functions such as procurement , production , sales or financing and the cross-sectional or service functions such as company management , human resources , administration , information , research and development and logistics have expectations that are typical for their area, which only indirectly - via a change in the action parameters - can be influenced. Many of the plan variables used in corporate planning, such as sales volume , sales or costs, are among the reaction parameters , as they represent the effects of the measures taken.
If a decision-maker, for example in company management, has the task of setting the sales price of a new product, he will usually orient himself towards the cost of goods and then add the profit margin , which results in the sales price. His decision to officially communicate this sales price as such in the company and to offer it on the market is an action parameter. The first response parameter to this will be that he can assume that this sales price is viewed and taken into account in the company and in the market as the official price. The most important response parameter is the sales volume, because it is uncertain when the price is set how the customers will react to a price change.
Response parameters in business
Response parameters are a cause of the uncertainty inherent in a market economy order, since it is uncertain how other economic agents will react to defined action parameters. Response parameters must therefore be predicted using a prognosis . If the decision-maker has information about the probability of occurrence of the reaction parameters , it is a decision under uncertainty ; if such ideas of probability are absent, a decision is made under uncertainty .
If a competitor lowers his sales price (action parameter) and he expects an increase in his sales (reaction parameter), then the other providers - with otherwise constant conditions - have to reckon with lower sales in their companies . You will then have to react with your own price reductions, discounts , quality improvements or the like. These reactions represent reaction parameters for the price-reducing company.
In 1973, Burkhardt Röper listed 23 instruments for credit institutions , "whereby the action parameter 'price' has the highest priority". The setting of debit and credit interest is an action parameter for banks; the response parameters to this are the credit demand in the lending business and the change in volume in the deposit business . The non-banks therefore behave as volume adjusters when banks change interest rates . In addition to the loan interest , the loan amount and loan collateral are further operational parameters for banking operations. Debit and credit interest rates and the level of interest rates are in turn, from the perspective of the central bank, a reaction parameter to the key interest rate used by the central bank as an action parameter . As with Ludwig Mülhaupt , the Bundesbank also has the option of defining the refinancing quotas and the quality of central bank-eligible securities to be pledged as action parameters . For insurance companies , the setting of the insurance premiums is an essential action parameter, to which the policyholder can react with a change in the sum insured or with new insurance / cancellation of insurance.
In the consumption of goods and services , the action parameter of the consumer is a certain product ; price, brand, quality, time of purchase and money spent are added as essential reaction parameters.
Response parameters in everyday life
The term originating from decision theory can be applied to all everyday situations in which decisions are pending. For those who have to decide which means of transport to use to travel to work and choose the bicycle , for them the bicycle is the action parameter , the road traffic is a reaction parameter and the weather is a data parameter.
Individual evidence
- ^ Ragnar Frisch, Monopole-Polypole , in: Nat Tidssskr. 71, 1933, pp. 241-259.
- ↑ Ingvar Svennilson, Ekonomisk Planering. Teoretiska studir , 1938, p. 28.
- ↑ Ingvar Svennilson, Ekonomisk Planering. Teoretiska studir , 1938, p. 137.
- ↑ Erich Schneider, Basics of Planning and Standard Cost Accounting , in: Volkswirtschaft und Betriebswirtschaft, 1964, p. 314.
- ↑ Erich Kosiol, Building Blocks of Business Administration , Volume 1, 1973, p. 362.
- ↑ Erich Frese, Control and Management , 1968, p. 31 with further references
- ↑ Erich Kosiol, Introduction to Business Administration , 1968, p. 48 f.
- ↑ a b Gerhard Vogler, General Business Administration , 1976, p. 56.
- ↑ Erich Frese, Control and Management , 1968, p. 32.
- ↑ Gerhard Kolb, Introduction to Economics , 2012, p. 63.
- ↑ Udo Müller / Hartmut Pöhlmann, Allgemeine Volkswirtschaftslehre , 1977, p. 79.
- ↑ Burkhardt Röper, The Competitive Function of the German Savings Banks and the Subsidiarity Principle , 1973, p. 82.
- ↑ Frank DeLeeuw, A Model of Financial Behavior , in: JS Duesenberry / G Fromm / LR Klein / E Cow, The Brookings Quarterly Economic Model of the United States, 1965, p 508th
- ↑ The key rate is the interest rate on the main refinancing instruments of the ECB
- ^ Ludwig Mülhaupt, Introduction to the Business Administration of the Banks , 1977, p. 59.
- ^ Philip Kotler, Basics of Marketing , 1999, p. 272.