0000000000004296
AUTHOR
Jyrki Wallenius
V I G — A Visual and Dynamic Decision Support System for Multiple Objective Linear Programming
In this paper we describe the principles of VIG (Visual Interactive Goal Programming), a Multiple Criteria Decision Support System, recently developed by Korhonen. PARETO RACE is a corner-stone of this system, which is designed to support both the modelling and solving of a multiple objective linear programming problem. The interface is based on one main menu, spreadsheets, and interactive use of computer graphics. VIG provides the decision-maker with the possibility to approach his/her decision problem by using an “evolutionary approach”. This means that the decision-maker does not have to specify the model precisely prior to solving the problem. In fact, the model evolves progressively. W…
Testing Prospect Theory in a Deterministic Multiple Criteria Decision-Making Environment
Prospect theory by Kahneman and Tversky [7] is tested in a deterministic multiple criteria decision-making context. In two experiments conducted in classroom settings subjects made pairwise preference comparisons of condominiums for sale. The results of the experiments indicate that the traditional value model did not explain the subjects' revealed preferences as well as the prospect model. We conclude that prospect theory is a reasonable model of choice for many individuals in such a context.
Solving the Discrete Multiple Criteria Problem using Convex Cones
An interactive method employing pairwise comparisons of attainable solutions is developed for solving the discrete, deterministic multiple criteria problem assuming a single decision maker who has an implicit quasi-concave increasing utility (or value) function. The method chooses an arbitrary set of positive multipliers to generate a proxy composite linear objective function which is then maximized over the set of solutions. The maximizing solution is compared with several solutions using pairwise judgments asked of the decision maker. Responses are used to eliminate alternatives using convex cones based on expressed preferences, and then a new set of weights is found that satisfies the i…
Principles for Solving Sequential Multiple Criteria Decision Problems
In this paper a sequential multiple criteria decision problem is studied. The problem arises, when a decision maker is unable to consider all possible decision alternatives simultaneously. If the decision maker evaluates only a subset of all decisions from among which he chooses the most preferred alternative, it is not necessarily 'globally' best. In this context an interesting question is, how good the most preferred alternative is and what the chances are of finding a better solution by considering additional alternatives. The principles of a an approach based on probability theory to solving this problem are described and illustrated with numerical examples.
An interactive approach to multiple criteria optimization with multiple decision-makers
In this article we propose a formal man-machine interactive approach to multiple criteria optimization with multiple decision makers. The approach is based on some of our earlier research findings in multiple criteria decision making. A discrete decision space is assumed. The same framework may readily be used for multiple criteria mathematical programming problems. To test the approach two experiments were conducted using undergraduate Business School students as subjects in Finland and in the United States. The context was, respectively, a high-level Finnish labor-management problem and the management-union collective bargaining game developed at the Krannert Graduate School of Management…
Testing the Form of a Decision-maker's Multiattribute Value Function Based on Pairwise Preference Information
In a recent paper we presented a test, based on pairwise preference information, to identify to which class of functions (linear, quasi-concave, or neither) a decision-maker's (implicit) value function belongs. In this note we investigate the power of the test. Some improvements to the test are also suggested.
Growing pains and blessings: Manifestations and implications of equity crowdfunding industry maturation
The equity crowdfunding industry has grown significantly in the past decade. Industry life cycle theory suggests that growth dynamics and relations between stakeholders change as industries mature. The present study examines the characteristics and implications of maturation in the equity crowdfunding industry via the lens of industry life cycle theory. Specifically, we explore whether the industry is reverting to traditional entrepreneurial finance practice, or whether it retains its original distinguishing characteristics. Accordingly, we first assess changes with respect to users (investors) and products (campaigns and investment objects). Second, we assess the implications of these chan…
Multiple Objective Analysis of Input-Output Models for Emergency Management
This paper shows how a visual, interactive, dynamic multiple objective linear programming decision support system can effectively be used for analyzing input-output models. We have applied our approach to studying the quantitative effects of economic or political crises to the Finnish economy. Examples of such crises are nuclear power plant accidents, trade embargoes, and international conflicts. An input-output model of the Finnish economy with 17 industries (sectors) is employed. Our system has been implemented on a microcomputer and is being used by the National Board of Economic Defense. Several typical case situations are discussed.
A Methodology for Solving the Multiple Criteria Macroeconomic Policy Problem
In this paper we review the results of our research on using interactive multiple criteria optimization methods for solving macroeconomic policy problems in Finland. An existing econometric model describing the interrelationships between different variables and sectors of the economy is used. In addition, the current status of the implementation work is reported and some possibilities for future research are discussed.
Further Developments and Tests of a Progressive Algorithm for Multiple Criteria Decision Making
P. Korhonen, H. Moskowitz, and J. Wallenius (1986) developed a progressive algorithm and the supporting theory for modeling and solving multiple criteria decision problems with discrete alternatives. A special feature of the algorithm is that it relaxes the usual assumption of a fixed set of available decision alternatives and complete knowledge of a decision maker's (DM's) preference structure or value function. The algorithm is based on progressively sampling the decision space, obtaining preference information from the DM, determining the likelihood of finding possibly/surely better alternatives, and based on this information, continuing the search or terminating it by making the final …
Conditional Versus Joint Probability Assessments
AbstractThe assessment of conditional and / or joint probabilities of events that constitute scenarios is necessary for sound planning, forecasting, and decision making. The assessment process is complex and subtle, and various difficulties are encountered in the elicitation of such probabilities such as, implicit violations ofthe probability calculus and some meaningfjilness conditions. The necessary and sufficient as well as meaningfulness conditions that the elicited information on conditional and joint probabilities must satisfy are evaluated against actual assessments empirically. A high frequency of violation of these conditions was observed in assessing both conditional and joint pro…
A Decision Model for the Multiple Criteria Group Secretary Problem: Theoretical Considerations
A decision model is developed for solving the discrete multiple criteria group secretary problem. The model extends the single decision-maker progressive algorithm by Korhonen, Moskowitz and Wallenius to group contexts. As the original progressive algorithm, it relaxes the usual assumption of a fixed set of available decision alternatives and complete knowledge of a decision-maker's preference structure (value function). The decision-makers are requested to settle on a compromise, if possible. The model then proceeds with determining the likelihood of finding possibly/surely better settlements (compromises). Linear value functions, linear prospect theory-type value functions, and quasiconca…
An Interactive Multiple Objective Linear Programming Method for a Class of Underlying Nonlinear Utility Functions
This paper develops a method for interactive multiple objective linear programming assuming an unknown pseudo concave utility function satisfying certain general properties. The method is an extension of our earlier method published in this journal (Zionts, S., Wallenius, J. 1976. An interactive programming method for solving the multiple criteria problem. Management Sci. 22 (6) 652–663.). Various technical problems present in predecessor versions have been resolved. In addition to presenting the supporting theory and algorithm, we discuss certain options in implementation and summarize our practical experience with several versions of the method.
Observations Regarding Choice Behaviour in Interactive Multiple Criteria Decision-Making Environments: An Experimental Investigation
Many interactive procedures have been developed for solving optimization problems having multiple criteria. In such procedures, an exploration over the feasible or efficient region is conducted for locating the most preferred solution. As Steuer (1986) notes, interactive procedures are characterized by phases of decision-making alternating with phases of computation. Generally a pattern is established that we keep repeating until termination. At each iteration, a solution, or group of solutions, is generated for a decision-maker’s (DM’s) examination. Based on the examination, the DM inputs information to the solution procedure in the form of tradeoffs, pairwise comparisons, aspiration level…
Recent Developments in our Approach to Multiple-Criteria Decision Making
Approximately ten years ago we began a study of multiple criteria decision making at the European Insti tute for Advanced Studies in Management in Brussels. The project started as a way of finding a multiple objective linear programming method that would work better than those tested by Wallenius (1975). We did a substantial amount of work on the problem and came up with such a method (Zionts and Wallenius, 1976). Wallenius’ (1975) thesis, one of the first outputs of that project, comprises a rather significant piece of research in the multiple criteria area. Since that time our work has continued. We have worked together on a great deal of it; some of it has involved students and other fac…