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In this article, we derive the joint Laplace transform of the sequential probability ratio test (SPRT) and the resulting stopped random walk process for the negative exponential model. The Laplace transform is derived by solving a related difference equation. This technique is novel because it only takes advantage of the Markov structure and does not rely on the typical martingale methods used for deriving the Laplace transform of other SPRTs. The joint Laplace transform provides the joint distribution of the SPRT and the associated stopped process, which is a new result. Even the marginal distributions were hitherto unknown. © 2017 Taylor & Francis.
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The paper describes a pedagogical simulation that allows students to explore strategic goal conflict within the context of systems theory. Systems theory emphasizes, among other things, complexity, non-linear relationships, unintended consequences, time delays, and dynamics. Another important aspect of systems thinking is contextual thinking, where objects or relationships cannot be taken as standalone or absolute, but are critically dependent on system structure and the environment. And while strategic planning has long emphasized the importance of environment, it may be difficult for students to experience or appreciate its importance in the planning process. The simulation provides an experiential exercise for a strategy course. The paper provides a summary of systems thinking and strategic goal conflict, a description of the simulation, teaching notes, and experience with the exercise.
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