A Fuzzy Entropy-Based Group Consensus Measure for Financial Investments

József Dombi, Jenő Fáró and Tamás Jónás ()
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József Dombi: Institute of Informatics, University of Szeged, 6720 Szeged, Hungary
Jenő Fáró: Faculty of Economics, ELTE Eötvös Loránd University, 1088 Budapest, Hungary
Tamás Jónás: Faculty of Economics, ELTE Eötvös Loránd University, 1088 Budapest, Hungary

Mathematics, 2023, vol. 12, issue 1, 1-18

Abstract: This study presents a novel, fuzzy entropy-based approach to the measurement of consensus in group decision making. Here, the basic assumption is that the decision inputs are the ‘yes’ or ‘no’ votes of group members on a financial investment that has a particular expected rate of return. In this paper, using a class of fuzzy entropies, a novel consensus measure satisfying reasonable requirements is introduced for a case where the decision inputs are dichotomous variables. It is also shown here that some existing consensus measures are just special cases of the proposed fuzzy entropy-based consensus measure when the input variables are dichotomous. Next, the so-called group consensus map for financial investments is presented. It is demonstrated that this construction can be used to characterize the level of consensus among the members of a group concerning financial investments as a function of the expected rate of return. Moreover, it is described how a consensus map can be constructed from empirical data and how this map is connected with behavioral economics.

Keywords: consensus measure; group decision making; financial investment; consensus map (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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