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Adversarial life testing: A Bayesian negotiation model

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  • Rufo, M.J.
  • Martín, J.
  • Pérez, C.J.

Abstract

Life testing is a procedure intended for facilitating the process of making decisions in the context of industrial reliability. On the other hand, negotiation is a process of making joint decisions that has one of its main foundations in decision theory. A Bayesian sequential model of negotiation in the context of adversarial life testing is proposed. This model considers a general setting for which a manufacturer offers a product batch to a consumer. It is assumed that the reliability of the product is measured in terms of its lifetime. Furthermore, both the manufacturer and the consumer have to use their own information with respect to the quality of the product. Under these assumptions, two situations can be analyzed. For both of them, the main aim is to accept or reject the product batch based on the product reliability. This topic is related to a reliability demonstration problem. The procedure is applied to a class of distributions that belong to the exponential family. Thus, a unified framework addressing the main topics in the considered Bayesian model is presented. An illustrative example shows that the proposed technique can be easily applied in practice.

Suggested Citation

  • Rufo, M.J. & Martín, J. & Pérez, C.J., 2014. "Adversarial life testing: A Bayesian negotiation model," Reliability Engineering and System Safety, Elsevier, vol. 131(C), pages 118-125.
    • Handle: RePEc:eee:reensy:v:131:y:2014:i:c:p:118-125
    DOI: 10.1016/j.ress.2014.06.007
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    References listed on IDEAS

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    1. James K. Sebenius, 1992. "Negotiation Analysis: A Characterization and Review," Management Science, INFORMS, vol. 38(1), pages 18-38, January.
    2. Bo Henry Lindqvist, 2008. "Maintenance of Repairable Systems," Springer Series in Reliability Engineering, in: Complex System Maintenance Handbook, chapter 10, pages 235-261, Springer.
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    5. Happich, Michael, 2001. "Utility functions for life years and health status: An additional remark," Discussion Papers 2001/6, Technische Universität Berlin, School of Economics and Management.
    6. Rufo, M.J. & Pérez, C.J. & Martín, J., 2009. "Local parametric sensitivity for mixture models of lifetime distributions," Reliability Engineering and System Safety, Elsevier, vol. 94(7), pages 1238-1244.
    7. Jozani, Mohammad Jafari & Nematollahi, Nader & Shafie, Khalil, 2002. "An admissible minimax estimator of a bounded scale-parameter in a subclass of the exponential family under scale-invariant squared-error loss," Statistics & Probability Letters, Elsevier, vol. 60(4), pages 437-444, December.
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    Cited by:

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    2. Kęstutis Peleckis, 2015. "The Use of Game Theory for Making Rational Decisions in Business Negotiations: A Conceptual Model," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 3(4), pages 105-121.
    3. Insua, David Rios & Ruggeri, Fabrizio & Soyer, Refik & Wilson, Simon, 2020. "Advances in Bayesian decision making in reliability," European Journal of Operational Research, Elsevier, vol. 282(1), pages 1-18.
    4. Ríos Insua, David & Ruggeri, Fabrizio & Soyer, Refik & Rasines, Daniel G., 2018. "Adversarial issues in reliability," European Journal of Operational Research, Elsevier, vol. 266(3), pages 1113-1119.

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