{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/78738"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/78738","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Theoretical and experimental examinations of target-based decision making","abstract":"Target based decision making occurs when a decision maker wishes to maximize the probability of attaining some output or performance level. The target may be set externally, for example, by an employer as part of an incentive system. Or, the target may simply be based on a decision maker’s individual goals and understanding of implicit expectations. Questions arise concerning the effects of these decisions on the performance of an organization. Further, if these decisions affect organizational value, how well can these decisions be characterized and predicted? This research explores these questions—and others—using both theoretical and experimental means. A value gap model is developed that facilitates simulation based insights to target optimality. The effect of a target is characterized in terms of a value gap that is defined as the difference in value between what was selected based on a target and what the organization would have preferred. A copula based method is used to simulate future decision situations and the expected value gap is calculated as a function of model parameters. Several trends in target optimality are observed that are robust to changes in the probability distributions over future decision alternatives. Specifically, the optimal target (i) decreases as the organization’s risk aversion increases, (ii) increases as the number of available alternatives increase, and (iii) the presence of an efficient frontier of decision alternatives reduces the consequences of setting targets higher than optimal. A behavioral experiment is conducted to compare target-based decision making to decisions in the absence of a target. The results show that while target based decision making can be well predicted based on the properties of the decision alternatives alone. Decisions in the absence of a target, however, cannot be predicted based on the alternatives alone. Information about individualized differences in risk preferences is required to identify trends in the decision making behavior. These results have strong implications for decisions about whether or not to used target based incentives within an organization. The research concludes with an application to engineering systems and a discussion of additional questions raised by the research that point to directions for new research.","abstract_html":"Target based decision making occurs when a decision maker wishes to maximize the probability of attaining some output or performance level. The target may be set externally, for example, by an employer as part of an incentive system. Or, the target may simply be based on a decision maker’s individual goals and understanding of implicit expectations. Questions arise concerning the effects of these decisions on the performance of an organization. Further, if these decisions affect organizational value, how well can these decisions be characterized and predicted? This research explores these questions—and others—using both theoretical and experimental means. A value gap model is developed that facilitates simulation based insights to target optimality. The effect of a target is characterized in terms of a value gap that is defined as the difference in value between what was selected based on a target and what the organization would have preferred. A copula based method is used to simulate future decision situations and the expected value gap is calculated as a function of model parameters. Several trends in target optimality are observed that are robust to changes in the probability distributions over future decision alternatives. Specifically, the optimal target (i) decreases as the organization’s risk aversion increases, (ii) increases as the number of available alternatives increase, and (iii) the presence of an efficient frontier of decision alternatives reduces the consequences of setting targets higher than optimal. A behavioral experiment is conducted to compare target-based decision making to decisions in the absence of a target. The results show that while target based decision making can be well predicted based on the properties of the decision alternatives alone. Decisions in the absence of a target, however, cannot be predicted based on the alternatives alone. Information about individualized differences in risk preferences is required to identify trends in the decision making behavior. These results have strong implications for decisions about whether or not to used target based incentives within an organization. The research concludes with an application to engineering systems and a discussion of additional questions raised by the research that point to directions for new research.","abstract_has_math":false,"creators":["Hupman, Andrea C."],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Systems & Entrepreneurial Engr","degree_department":null,"school":null,"contributors":["Abbas, Ali E.","Beck, Carolyn","Price, Raymond","Michael, Steven"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2015,"date_issued":"2015-07-22T22:45:21Z","date_published":"2015-07-22T22:45:21Z","updated_at":"2026-07-22T22:26:12Z","subjects":["decision analysis","Incentives","targets","target-based decision making"],"languages":["en"],"rights":["Copyright 2015 Andrea C. Hupman"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/2142/78738","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Abbas, Ali E.","Beck, Carolyn","Price, Raymond","Michael, Steven"]},{"key":"dc:creator","label":"Author","values":["Hupman, Andrea C."]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2015-07-22T22:45:21Z","2017-07-23T09:15:30Z","2015-05","2015-04-20","2015-5"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Systems & Entrepreneurial Engr"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["decision analysis","Incentives","targets","target-based decision making"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2015 Andrea C. Hupman"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/78738"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Target based decision making occurs when a decision maker wishes to maximize the probability of attaining some output or performance level. The target may be set externally, for example, by an employer as part of an incentive system. Or, the target may simply be based on a decision maker’s individual goals and understanding of implicit expectations. Questions arise concerning the effects of these decisions on the performance of an organization. Further, if these decisions affect organizational value, how well can these decisions be characterized and predicted? This research explores these questions—and others—using both theoretical and experimental means. A value gap model is developed that facilitates simulation based insights to target optimality. The effect of a target is characterized in terms of a value gap that is defined as the difference in value between what was selected based on a target and what the organization would have preferred. A copula based method is used to simulate future decision situations and the expected value gap is calculated as a function of model parameters. Several trends in target optimality are observed that are robust to changes in the probability distributions over future decision alternatives. Specifically, the optimal target (i) decreases as the organization’s risk aversion increases, (ii) increases as the number of available alternatives increase, and (iii) the presence of an efficient frontier of decision alternatives reduces the consequences of setting targets higher than optimal. A behavioral experiment is conducted to compare target-based decision making to decisions in the absence of a target. The results show that while target based decision making can be well predicted based on the properties of the decision alternatives alone. Decisions in the absence of a target, however, cannot be predicted based on the alternatives alone. Information about individualized differences in risk preferences is required to identify trends in the decision making behavior. These results have strong implications for decisions about whether or not to used target based incentives within an organization. The research concludes with an application to engineering systems and a discussion of additional questions raised by the research that point to directions for new research.","Submission published under a 24 month embargo labeled 'Closed Access', the embargo will last until 2017-05-01","The student, Andrea Hupman, accepted the attached license on 2015-04-15 at 20:38.","The student, Andrea Hupman, submitted this Dissertation for approval on 2015-04-15 at 20:53.","This Dissertation was approved for publication on 2015-04-20 at 15:37.","DSpace SAF Submission Ingestion Package generated from Vireo submission #7880 on 2015-07-22 at 14:24:44","Made available in DSpace on 2015-07-22T22:45:21Z (GMT). No. of bitstreams: 2 HUPMAN-DISSERTATION-2015.pdf: 3261539 bytes, checksum: 6172475c283966700f89c0971162f2e2 (MD5) LICENSE.txt: 4210 bytes, checksum: 5f36b688fed3661a1e8752e2cccdbf0e (MD5) Previous issue date: 2015-04-20","Embargo set by: Seth Robbins for item 79979 Lift date: 2017-07-22T22:46:21Z Reason: Author requested closed access (OA after 2yrs) in Vireo ETD system","Limited Restriction Lifted for Item 79979 on 2017-07-23T09:15:30Z."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Theoretical and experimental examinations of target-based decision making"]}]}],"canonical_facts":{"dc:contributor":["Abbas, Ali E.","Beck, Carolyn","Price, Raymond","Michael, Steven"],"dc:creator":["Hupman, Andrea C."],"dc:date":["2015-07-22T22:45:21Z","2017-07-23T09:15:30Z","2015-05","2015-04-20","2015-5"],"dc:description":["Target based decision making occurs when a decision maker wishes to maximize the probability of attaining some output or performance level. The target may be set externally, for example, by an employer as part of an incentive system. Or, the target may simply be based on a decision maker’s individual goals and understanding of implicit expectations. Questions arise concerning the effects of these decisions on the performance of an organization. Further, if these decisions affect organizational value, how well can these decisions be characterized and predicted? This research explores these questions—and others—using both theoretical and experimental means. A value gap model is developed that facilitates simulation based insights to target optimality. The effect of a target is characterized in terms of a value gap that is defined as the difference in value between what was selected based on a target and what the organization would have preferred. A copula based method is used to simulate future decision situations and the expected value gap is calculated as a function of model parameters. Several trends in target optimality are observed that are robust to changes in the probability distributions over future decision alternatives. Specifically, the optimal target (i) decreases as the organization’s risk aversion increases, (ii) increases as the number of available alternatives increase, and (iii) the presence of an efficient frontier of decision alternatives reduces the consequences of setting targets higher than optimal. A behavioral experiment is conducted to compare target-based decision making to decisions in the absence of a target. The results show that while target based decision making can be well predicted based on the properties of the decision alternatives alone. Decisions in the absence of a target, however, cannot be predicted based on the alternatives alone. Information about individualized differences in risk preferences is required to identify trends in the decision making behavior. These results have strong implications for decisions about whether or not to used target based incentives within an organization. The research concludes with an application to engineering systems and a discussion of additional questions raised by the research that point to directions for new research.","Submission published under a 24 month embargo labeled 'Closed Access', the embargo will last until 2017-05-01","The student, Andrea Hupman, accepted the attached license on 2015-04-15 at 20:38.","The student, Andrea Hupman, submitted this Dissertation for approval on 2015-04-15 at 20:53.","This Dissertation was approved for publication on 2015-04-20 at 15:37.","DSpace SAF Submission Ingestion Package generated from Vireo submission #7880 on 2015-07-22 at 14:24:44","Made available in DSpace on 2015-07-22T22:45:21Z (GMT). No. of bitstreams: 2 HUPMAN-DISSERTATION-2015.pdf: 3261539 bytes, checksum: 6172475c283966700f89c0971162f2e2 (MD5) LICENSE.txt: 4210 bytes, checksum: 5f36b688fed3661a1e8752e2cccdbf0e (MD5) Previous issue date: 2015-04-20","Embargo set by: Seth Robbins for item 79979 Lift date: 2017-07-22T22:46:21Z Reason: Author requested closed access (OA after 2yrs) in Vireo ETD system","Limited Restriction Lifted for Item 79979 on 2017-07-23T09:15:30Z."],"dc:format":["application/pdf"],"dc:identifier":["http://hdl.handle.net/2142/78738"],"dc:language":["en"],"dc:rights":["Copyright 2015 Andrea C. Hupman"],"dc:subject":["decision analysis","Incentives","targets","target-based decision making"],"dc:title":["Theoretical and experimental examinations of target-based decision making"],"dc:type":["text"],"thesis:degree_discipline":["Systems & Entrepreneurial Engr"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:26:12Z"}