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Solved: What sequence of pseudorandom numbers is generated

Discrete Mathematics and Its Applications | 7th Edition | ISBN: 9780073383095 | Authors: Kenneth Rosen ISBN: 9780073383095 37

Solution for problem 6E Chapter 4.5

Discrete Mathematics and Its Applications | 7th Edition

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Discrete Mathematics and Its Applications | 7th Edition | ISBN: 9780073383095 | Authors: Kenneth Rosen

Discrete Mathematics and Its Applications | 7th Edition

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Problem 6E

What sequence of pseudorandom numbers is generated using the linear congruential generator xn+1= = (4xn + 2) mod 7 with seed x0 = 3?

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STR203 March 15, 2016 Project – detailed outline on BB, articles are food for thought Organization – 3-­‐legged stool • Class has been focused on strategy so far à now understand organization Williamson – asymmetry developed because of relationship • Relationship because of asset specificity Conflicts if one party feels taken advantage of • Lead to underinvestment by both parties • Renegotiation • Ex. company sends certain employees to special training (similar idea) Opportunism – from information asymmetry • Could lead to cheating, deliberately confusing or misleading behavior • Wealth creation incentive on both sides Hierarchical organization (form of governance) to resolve conflict • One owner à settles dispute by directive • Larger organizations à boundaries, limits of authority Firms develop relationship within/without that dictates how they operate; sets up expectations Asymmetry ex. Company A builds factory for Company B – Company B knows demand is slowing Firms are economizers for market – repeat transactions vs. individual • Specialized knowledge – policing/enforcement powers Firms grapple with incentive conflicts, incentives: • Paycheck • Decision making rights as wealth maximizer Misallocation of resources à inefficiency Externally – actions of one party impact the well being of another party • Outside of someone’s immediate control • Good/bad Relationship between strategy and organizations is complicated • Bigger company à worse, more complications Ex. A company being bought from the perspective of a partner • Would benefit as a shareholder but hurt as a partner (get fired) Different incentives/perceptions of wealth March 17, 2016 Marketplace uses price to allocate resources – concerns with using it as the only indicator à misallocation of resources Class firms owned by a single person – controls all decisions Can be owned by thousands of shareholders • Ex. Coca Cola, IBM, ATT (NYSE) Firm is the focal point for contracts • Negotiate terms, construct/police/enforce agreement • Can sue/be sued Firms are a legal construct • Stakeholders have standing in court vs. a firm o Suppliers, customers, employees, labor unions, shareholders, insurance companies, etc. • Can sue firm/firm can sue these parties • Can sue for any reason Who represents a company • Larger company – CEO & maybe company lawyer • Small companies – the owner Why these people Who did contracting • Owners are residual claimant – maximize rewards, employee goals not aligned • Big firm – owners are shareholders, thousands of shareholders (need responsible party) o Hire professionals à motivate company growth, “Board of Directors” o Shareholders vote once a year on their representation § Sets CEO/senior exec compensation Board of Directors – goal: support CEO growing company Areas of conflict • More effort an exec spends, value of firm increases (follows effort) o Reduces the executives utlity U = f(S,B) • Shareholders don’t want to overpay execs [S + B = C] (salary + benefit = compensation), perquisites o Execs want higher compensation packages Decision rights – compensation committee of board negotiates with CEO, metrics (growth) Measuring effort – difficult because we measure output rather than input • Certain number of hours equates to a certain output of product/service Easy to get tired/burnt out if dedicating too much to company • Need to extract some benefits for self Contract à outline expectations, rewards, consequences Agency Theory – once contract has been agreed – agent has incentive to act in own best interest, at expense of principal (shareholders) • Controlling mechanism – “monitor costs” • When monitor costs > reward recovery, stop (MC > MB) Monitor expenses and costs Value of firm steadily decrease if manager misallocate • Dissipating resources Ex. Nabisco – high agency costs, excessive expenditures • Goal should be to maximize value of the firm

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Chapter 4.5, Problem 6E is Solved
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Textbook: Discrete Mathematics and Its Applications
Edition: 7
Author: Kenneth Rosen
ISBN: 9780073383095

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Solved: What sequence of pseudorandom numbers is generated