IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v56y2005i9d10.1057_palgrave.jors.2601992.html
   My bibliography  Save this article

Designing win-win financial loan products for consumers and businesses

Author

Listed:
  • R L Keeney

    (Fuqua School of Business, Duke University)

  • R M Oliver

    (College of Engineering, University of California)

Abstract

With the many possible designs that a financial company can offer to a consumer (eg terms, price, quality, features), a company can identify win-win products for both the consumer and the company. A key to identifying win-win products is to explicitly integrate the consumer's preferences for price and quality with the company's preferences for profit and market share. This paper builds a model that identifies the set of win-win products by integrating the preferences of buyer and seller. For any product not in this set, there is at least one product in the set that is better for both buyer and seller. The company's preferences are then used to select the optimal offer from the win-win set. Our development logically derives the results by focusing on financial products (eg loans, mortgages, credit cards) to consumers in the multitrillion dollar retail credit business.

Suggested Citation

  • R L Keeney & R M Oliver, 2005. "Designing win-win financial loan products for consumers and businesses," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(9), pages 1030-1040, September.
    • Handle: RePEc:pal:jorsoc:v:56:y:2005:i:9:d:10.1057_palgrave.jors.2601992
    DOI: 10.1057/palgrave.jors.2601992
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2601992
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2601992?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Keeney,Ralph L. & Raiffa,Howard, 1993. "Decisions with Multiple Objectives," Cambridge Books, Cambridge University Press, number 9780521438834.
    2. Abbie Griffin & John R. Hauser, 1993. "The Voice of the Customer," Marketing Science, INFORMS, vol. 12(1), pages 1-27.
    3. R M Oliver & E Wells, 2001. "Efficient frontier cutoff policies in credit portfolios," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(9), pages 1025-1033, September.
    4. Ralph L. Keeney & Timothy L. McDaniels, 1992. "Value-Focused Thinking about Strategic Decisions at BC Hydro," Interfaces, INFORMS, vol. 22(6), pages 94-109, December.
    5. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    6. Paul E. Green & Abba M. Krieger & Yoram Wind, 2001. "Thirty Years of Conjoint Analysis: Reflections and Prospects," Interfaces, INFORMS, vol. 31(3_supplem), pages 56-73, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. P Ma & J Crook & J Ansell, 2010. "Modelling take-up and profitability," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(3), pages 430-442, March.
    2. Crook, Jonathan N. & Edelman, David B. & Thomas, Lyn C., 2007. "Recent developments in consumer credit risk assessment," European Journal of Operational Research, Elsevier, vol. 183(3), pages 1447-1465, December.
    3. L C Thomas & R W Oliver & D J Hand, 2005. "A survey of the issues in consumer credit modelling research," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(9), pages 1006-1015, September.
    4. R T Stewart, 2011. "A profit-based scoring system in consumer credit: making acquisition decisions for credit cards," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(9), pages 1719-1725, September.
    5. Andreeva, Galina & Ansell, Jake & Crook, Jonathan, 2007. "Modelling profitability using survival combination scores," European Journal of Operational Research, Elsevier, vol. 183(3), pages 1537-1549, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J-B Yang & D-L Xu & X Xie & A K Maddulapalli, 2011. "Multicriteria evidential reasoning decision modelling and analysis—prioritizing voices of customer," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(9), pages 1638-1654, September.
    2. Olivier Toubia & Duncan I. Simester & John R. Hauser & Ely Dahan, 2003. "Fast Polyhedral Adaptive Conjoint Estimation," Marketing Science, INFORMS, vol. 22(3), pages 273-303.
    3. Osama A. B. Hassan, 2003. "A Value-Focused Thinking Approach For The Environmental Management Of Buildings Construction," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 247-261.
    4. William Dale & Anirban Basu & Arthur Elstein & David Meltzer, 2008. "Predicting Utility Ratings for Joint Health States from Single Health States in Prostate Cancer: Empirical Testing of 3 Alternative Theories," Medical Decision Making, , vol. 28(1), pages 102-112, January.
    5. Wang, Juite & Lai, Jung-Yu & Chang, Chih-Hsin, 2016. "Modeling and analysis for mobile application services: The perspective of mobile network operators," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 146-163.
    6. Scholl, Armin & Manthey, Laura & Helm, Roland & Steiner, Michael, 2005. "Solving multiattribute design problems with analytic hierarchy process and conjoint analysis: An empirical comparison," European Journal of Operational Research, Elsevier, vol. 164(3), pages 760-777, August.
    7. Prithviraj Dasgupta & P. Michael Melliar-Smith & Louise E. Moser, 2006. "Maximizing Welfare Through Cooperative Negotiation In A Multi-Agent Internet Economy," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 331-351.
    8. Milad Zamanifar & Timo Hartmann, 2021. "A prescriptive framework for recommending decision attributes of infrastructure disaster recovery problems," Environment Systems and Decisions, Springer, vol. 41(4), pages 633-650, December.
    9. Daniel L. McFadden, 2013. "The New Science of Pleasure," NBER Working Papers 18687, National Bureau of Economic Research, Inc.
    10. Ralph L. Keeney, 2006. "Eliciting Knowledge About Values For Public Policy Decisions," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 739-749.
    11. Wright, Austin L. & Sonin, Konstantin & Driscoll, Jesse & Wilson, Jarnickae, 2020. "Poverty and economic dislocation reduce compliance with COVID-19 shelter-in-place protocols," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 544-554.
    12. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    13. KARRI PASANEN & MIKKO KURTTILA & JOUNI PYKÄlÄINEN & JYRKI KANGAS & PEKKA LESKINEN, 2005. "Mesta — Non-Industrial Private Forest Owners' Decision-Support Environment For The Evaluation Of Alternative Forest Plans Over The Internet," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 4(04), pages 601-620.
    14. Vadim Borokhov, 2014. "On the properties of nodal price response matrix in electricity markets," Papers 1404.3678, arXiv.org, revised Jan 2015.
    15. Merja Halme & Kari Linden & Kimmo Kääriä, 2009. "Patients’ Preferences for Generic and Branded Over-the-Counter Medicines," The Patient: Patient-Centered Outcomes Research, Springer;International Academy of Health Preference Research, vol. 2(4), pages 243-255, December.
    16. Li, Yan-Lai & Tang, Jia-Fu & Chin, Kwai-Sang & Jiang, Yu-Shi & Han, Yi & Pu, Yun, 2011. "Estimating the final priority ratings of engineering characteristics in mature-period product improvement by MDBA and AHP," International Journal of Production Economics, Elsevier, vol. 131(2), pages 575-586, June.
    17. Gan, Li & Ju, Gaosheng & Zhu, Xi, 2015. "Nonparametric estimation of structural labor supply and exact welfare change under nonconvex piecewise-linear budget sets," Journal of Econometrics, Elsevier, vol. 188(2), pages 526-544.
    18. Peterson, Jeffrey M. & Boisvert, Richard N. & de Gorter, Harry, 1999. "Multifunctionality and Optimal Environmental Policies for Agriculture in an Open Economy," Working Papers 127701, Cornell University, Department of Applied Economics and Management.
    19. Aldasoro, Iñaki & Delli Gatti, Domenico & Faia, Ester, 2017. "Bank networks: Contagion, systemic risk and prudential policy," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 164-188.
    20. Gatti, Nicolas & Cecil, Michael & Baylis, Kathy & Estes, Lyndon & Blekking, Jordan & Heckelei, Thomas & Vergopolan, Noemi & Evans, Tom, 2023. "Is closing the agricultural yield gap a “risky” endeavor?," Agricultural Systems, Elsevier, vol. 208(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:56:y:2005:i:9:d:10.1057_palgrave.jors.2601992. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.