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Such a process can be lengthy and inaccurate Let us look at a different approach Instead of constructing a deterministic price that re ects the derivative of some average quantity, one may construct uctuating prices that capture temporal congestion effects, and which result in the same average price For instance, if the quantities xi and y introduced in the previous sections are average ows of packets, it may be sensible to charge each packet individually for the exact amount of cost its existence imposes on the rest of the packets in the system while this packet travels through the network Then one may expect that, although each packet is charged a different amount, in a reasonably large time window the source of the packets will see the same average congestion price as is given in (95).

Anyone who has played chess knows that you need a strategy or plan, and that even a bad plan is better than no plans at all During the game, not everything happens as planned, but the plan nevertheless points in a direction, making the decision-making easier and faster A more skilled player will change the plan, in part or in whole, during the game and think ahead about alternative moves he or she will take as a result of possible moves by the opponent The business model functions as the plan for conducting a business It acts as the basis for decision-making and affects decisions about prioritizing goals, obtaining the right resources, or negotiating with subcontractors It also serves as an up-to-date description of how the business is performed, and allows for changes and improvements in the process, such as cutting costs, improving quality, or shortening time-to-market.

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The model can anticipate and forecast changes that are necessary to maintain an edge on the competition The model can t provide all the answers, but as for the chess player, it is a basic strategy or plan to follow An advantage of modeling in a language such as UML is that it visually depicts functions and relationships that are usually difficult to visualize clearly Ideally, a business model would consist of a single diagram that included all the important aspects of a business That is, however, never possible, since a business is so complex and has so many aspects that a single diagram can t capture all that information Instead, a business model is composed of the following: Views A business model is illustrated with a number of different views, each of which captures information about one or more specific aspects of the business.

A view is an abstraction from a specific v iewpoint, omitting details that are irrelevant to that viewpoint Multiple views are necessary to separate purposes and perspectives in a controlled way, without losing important information about the business Diagrams Each view consists of a number of diagrams, each of which shows a specific part of the business structure or a specific business situation Several diagrams are necessary to visualize a single view of the business model, since each type of diagram has a different purpose and expresses one important aspect or mechanism within the business model view A diagram can show a structure (eg, the organization of the business) or some dynamic collaboration (a number of objects and their interaction to demonstrate a specific process) The diagrams contain and express the objects, processes, rules, goals, and visions defined in the business situation Objects and Processes.

Often the bottom line in nance is to be able to compare portfolios, to be able to rank them and eventually choose the best We assume that the comparison between portfolios can be formulated in terms of a comparison among probability distribution functions (PDFs) of excess returns, f(x), relevant for each portfolio Section 62 develops non-EUT weights to incorporate attitudes to risk (loss aversion) parameterized by a Section 63 explains the powerful and elegant concept of stochastic dominance It is useful because given some relevant properties of the investor s U(x), whenever a portfolio A dominates another portfolio B, the investor obtains more utility in choosing the portfolio A over B Stochastic dominance involves the utility function U(x), which is generally unique for each individual.

Such prices are computed on a sample path rather than on an average basis It turns out that such price computation has important practical implementation advantages There is a possible problem with such pricing schemes on the supply side Who collects the charges If it is the network provider then he has an incentive to increase congestion, perhaps by under-investing in capacity To eliminate this possibility, there must be competition in supply Competition induces social welfare maximization, which has been our objective throughout this chapter..

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