Trade-Off Analysis in Discrete Decision Making Problems Under Risk

Maciej Nowak ()
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Maciej Nowak: The Karol Adamiecki University of Economics in Katowice

A chapter in New Developments in Multiple Objective and Goal Programming, 2010, pp 103-115 from Springer

Abstract: Abstract The paper considers a discrete stochastic multi-attribute decision making problem. This problem is defined by a finite set of alternatives A, a set of attributes X and a set E of evaluations of alternatives with respect to the attributes. In the stochastic case the evaluation of each alternative with respect to each attribute is characterized by a random variable. Thus, the comparison of two alternatives leads to the comparison of two vectors of probability distributions. In the paper a new interactive procedure for solving this problem is proposed. At each iteration a candidate alternative is proposed to the decision maker. If he/she is satisfied with the proposal, the procedure ends. Otherwise, the decision maker is asked to select the attribute to be improved and the attributes that can be decreased, ordered lexicographically starting with the one to be decreased first. The relations between distributions of trade-offs are used to generate a new proposal. An example is presented to illustrate the proposed technique.

Keywords: Decision Maker; Risk Measure; Stochastic Dominance; Candidate Alternative; Interactive Procedure (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-10354-4_7

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DOI: 10.1007/978-3-642-10354-4_7

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