1232 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 25 
model have to be improved first and which are of less importance 
This method proceeds in principle as follows. When we mis-specify 
the model which underlies the contiaints and when the decision 
maker maximizes the preference function subject to these constraints, 
his decision will in general deviate from the optimal decision and 
‘hus depress the utility level below the attainable maximum. This 
atility reduction is an appropriate measure for the seriousness of 
specification errors. For the special case of quadratic preference 
functions and linear constraints this idea was applied on a fairly large 
scale in my recent Optimal Decision Rules for Government and 
T'ndustry. 
FRISCH 
Regarding the point raised by Prof. THEIL, I think there is no 
serious or fundamental difference of opinion between us. Let me only 
remind you that I have not described the desires of the politicians, 
solely by means of the preference function. There are also political 
bounds coming into the picture. I have explained this rather fully :n 
‘he paper, but unfortunately I did not have time to insist very much 
on this in my oral presentation. 
171 Frisch - pag. 36