Nash Bargaining as a Military Decision Tool: An Example from Base Closure

摘要

Large organizations regularly face the problem of selecting from a large number of competing investment proposals put forward by internal divisions. In the private sector, optimizing over these proposals tends to be less difficult than in government organizations, both because more decision-making authority tends to be delegated to internal divisions, and, for those decisions that remain at the headquarters level, the various alternatives to a large degree can be scored or ranked objectively in terms of net present value or other purely financial metrics. By contrast, in the public sector, many more decisions are made at the headquarters level, and the proposals usually entail substantial non-monetary costs and benefits (for example, "military value") without an obvious common valuation methodology. Additionally, (possibly due to the partly subjective nature of the valuations) the central body might desire to appear fair or unbiased toward its internal divisions, perhaps to ensure each division retains a stake in the ultimate outcome and does not become discouraged from generating new proposals in the future.