Fuzzy decision making using the imprecise Dirichlet model

Lev V. Utkin and Yulia A. Zhuk

International Journal of Mathematics in Operational Research, 2013, vol. 5, issue 1, 74-90

Abstract: In most applications, probabilities of states of nature in decision making are not known exactly owing to a lack of complete information. If the available information is represented by a small number of statistical data, Walley's imprecise Dirichlet model may be regarded as a tool for determining interval probabilities of states of nature. It turns out that the resulting expected utilities constitute fuzzy sets and the initial decision problem is reduced to a fuzzy-decision problem. A numerical example illustrates the proposed approach to solving decision problems under the scarce information about states of nature. The approach is compared with ?-contaminated (robust) models. This approach can also be applied for the construction of fuzzy sets on the basis of statistical observations.

Keywords: decision problems; fuzzy sets; robust modelling; imprecise Dirichlet model; expected utilities; fuzzy decision making; uncertainty. (search for similar items in EconPapers)
Date: 2013
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