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In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is the loss of the most preferred alternative given up. [2] A tradeoff, then, involves a sacrifice that must be made to obtain a certain product, service, or experience, rather than others that could be made or obtained using the same required resources.
The trade-off theory of capital structure is the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger [ 1 ] who considered a balance between the dead-weight costs of bankruptcy and the tax saving ...
The Williamson tradeoff model is a theoretical model in the economics of industrial organization which emphasizes the tradeoff associated with horizontal mergers between gains resulting from lower costs of production and the losses associated with higher prices due to greater degree of monopoly power.
Risk return tradeoff is an investing term that describes the relationship between the risk an investor takes and the level of returns he realizes. The two move in tandem: as risk increases, so ...
The term, Tradespace, is a combination of the words "trade-off" and "playspace", where "trade-off" indicates the method of traversing the Tradespace in search of the optimal boundary space (e.g., trading off a cost in one cost center (variant A) for a cost in another cost center (variant B)).
Even though the bias–variance decomposition does not directly apply in reinforcement learning, a similar tradeoff can also characterize generalization. When an agent has limited information on its environment, the suboptimality of an RL algorithm can be decomposed into the sum of two terms: a term related to an asymptotic bias and a term due ...
Researchers in political economy have viewed the trade-off between military and consumer spending as a useful predictor of election success. [1] In this example, a nation has to choose between two options when spending its finite resources. It may buy either guns (invest in defense/military) or butter (invest in production of goods), or a ...
In evolutionary biology, an evolutionary tradeoff is a situation in which evolution cannot advance one part of a biological system without distressing another part of it. In this context, tradeoffs refer to the process through which a trait increases in fitness at the expense of decreased fitness in another trait.