The Use of Prospect Theory for Energy Sustainable Industry 4.0

Aldona Kluczek, Patrycja Żegleń and Daniela Matušíková
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Aldona Kluczek: Faculty of Mechanical and Industrial Engineering, Institute of Production Systems Organization, Warsaw University of Technology, 86 Narbutta Street, 02-524 Warsaw, Poland
Patrycja Żegleń: Institute of Economics and Finance, Social Sciences College, University of Rzeszów, 1 Ćwiklińskiej Street, 35-601 Rzeszów, Poland

Energies, 2021, vol. 14, issue 22, 1-29

Abstract: Industry 4.0 challenges facilities entrepreneurs to be competitive in the market in terms of energy by rational decision making. The goal of the paper is aimed at introducing Prospect Theory (PT) in Industry 4.0 for making decisions in order to select an optimal energy technology. To reach this goal, an approach for decision making on energy investment has been developed. In this paper, the authors have also provided a new opportunity to apply the new decision making method for strengthening Industry 4.0 by addressing energy concerns based on which rational decisions have been made. The study uses a fuzzy analytical hierarchy process for weighting the evaluation sub-criteria of energy technologies and a modified PT for making decisions related to the selection of one of the investigated technologies. The results show that it is possible to implement PT in Industry 4.0 via a decision making model for energy sustainability. Decision probability was achieved using a behavioral approach akin to Cumulative Prospect Theory (CPT) for the considered technology options. More specifically, the probability has created the same threshold-based decision possibilities. The authors used the case study method based on a company located in North America which produces hardwood lumber. The company uses a heating system containing natural gas-fired boilers. This study has also contributed to the literature on energy sustainable Industry 4.0 by demonstrating a new phenomenon/paradigm for energy sustainability-based Industry 4.0 through using PT. In this context, the main motivation of writing the article has been to promote energy sustainability via complex mechanisms and systems that involve interrelated functions.

Keywords: energy efficiency; sustainability; Industry 4.0; Prospect Theory; Cumulative Prospect Theory (CPT); technology; energy industry (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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