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Portfolios to Satisfy Damage Judgments: A Simple Approach

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  • Ferdinand K. Levy

    (Professor of Economics, College of Industrial Management, Georgia Institute of Technology, Atlanta, Georgia 30332)

Abstract

In a recent article in this journal, Professors Arnold and Botkin describe a linear programming [Arnold, Larry R., Donal Botkin. 1978. Portfolios to satisfy damage judgment: A linear programming approach. Interfaces 8 (2, February) 38--42.] procedure which will provide a minimum lump sum damage award to a successful plaintiff in a tort.Arnold and Botkin's paper suffers from a flaw which might keep a court from adopting the model. This flaw amply demonstrates why management scientists often have a very difficult time “selling their wares” to either laymen (like the lawyers or judge in Arnold and Botkin's article) or to decision makers. That is, the authors use a pseudocomplicated (to the layman) linear programming model to determine a solution, when a trivial, easily explainable and comprehendable rule-of-thumb, as we shall show, will suffice.

Suggested Citation

  • Ferdinand K. Levy, 1978. "Portfolios to Satisfy Damage Judgments: A Simple Approach," Interfaces, INFORMS, vol. 9(1), pages 106-107, November.
    • Handle: RePEc:inm:orinte:v:9:y:1978:i:1:p:106-107
    DOI: 10.1287/inte.9.1.106
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