Why The Future Of E-business Is R-business
Monday, May 7, 2012 - 06:40
in Mathematics & Economics
I make the case for replacing business executives with robots.*† This is no smart-ass slur on the intellects of executives. A transformation of business soon will be upon us. In the transformed enterprises, robots will take on more and more business decisions. Humans will retain a smaller but still crucially important role.The argument involves ‘real options’ and ‘agency theory.’ Explaining them is simple, though lengthy. So let’s get started, using an illustrative example:An opportunity requires Rineu Corporation to invest $10,000 now, with an assured first-year cash flow of $6,000. The second-year cash flow is uncertain with a 50-50 chance of either a $15,000 gain or a $5,000 loss. read more