<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>A decision-making process is considered for a firm, in which two coexisting groups of interests pursue different goals. An original model based on a non-neoclassical production function is proposed. The function satisfies the conditions formulated by R. Frisch, which makes it possible to investigate firms operating in the environment far from the perfect competition and pursuing goals other than profit maximization. A two-criteria optimization problem is formulated with the two criteria representing the goals of the groups: maximization of profit and maximization of income generated by the firm with respect to capital and labor. The problem is considered in two variants of the product market, namely the perfect and the imperfect competition. Solutions of the problem are analyzed including the derived Pareto sets. The importance of knowledge about the Pareto set in negotiations between the groups of interests in the firm is illustrated and discussed.</p>
</abstract>

A decision-making process is considered for a firm, in which two coexisting groups of interests pursue different goals. An original model based on a non-neoclassical production function is proposed. The function satisfies the conditions formulated by R. Frisch, which makes it possible to investigate firms operating in the environment far from the perfect competition and pursuing goals other than profit maximization. A two-criteria optimization problem is formulated with the two criteria representing the goals of the groups: maximization of profit and maximization of income generated by the firm with respect to capital and labor. The problem is considered in two variants of the product market, namely the perfect and the imperfect competition. Solutions of the problem are analyzed including the derived Pareto sets. The importance of knowledge about the Pareto set in negotiations between the groups of interests in the firm is illustrated and discussed.

Objectives of an enterprise. Bi-criteria analysis and negotiation problems

Control and Cybernetics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Objectives of an enterprise. Bi-criteria analysis and negotiation problems"}

A decision-making process is considered for a firm, in which two coexisting groups of interests pursue different goals. An original model based on a...

Objectives of an enterprise. Bi-criteria analysis and negotiation problems

Published Online: Jun 23, 2022

Page range: 169 - 193

Received: Dec 01, 2020

Accepted: Mar 01, 2021

DOI: https://doi.org/10.2478/candc-2021-0010

Keywords
economic modelling, production function, cost function, bi-criteria optimization, negotiations

© 2021 Jan Gadomski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Objectives of an enterprise. Bi-criteria analysis and negotiation problems

Published Online: Jun 23, 2022

Page range: 169 - 193

Received: Dec 01, 2020

Accepted: Mar 01, 2021

DOI: https://doi.org/10.2478/candc-2021-0010

Keywordseconomic modelling, production function, cost function, bi-criteria optimization, negotiations

© 2021 Jan Gadomski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
economic modelling, production function, cost function, bi-criteria optimization, negotiations