Search results for "Decision theory"
showing 10 items of 25 documents
Value of information in multiple criteria decision making: an application to forest conservation
2019
Abstract Developing environmental conservation plans involves assessing trade-offs between the benefits and costs of conservation. The benefits of conservation can be established with ecological inventories or estimated based on previously collected information. Conducting ecological inventories can be costly, and the additional information may not justify these costs. To clarify the value of these inventories, we investigate the multiple criteria value of information associated with the acquisition of improved ecological data. This information can be useful when informing the decision maker to acquire better information. We extend the concept of the value of information to a multiple crite…
A fuzzy ranking strategy for portfolio selection applied to the Spanish stock market
2007
In this paper we present a fuzzy ranking procedure for the portfolio selection problem. The uncertainty on the returns of each portfolio is approximated by means of a trapezoidal fuzzy number. The expected return and risk of the portfolio are then characteristics of that fuzzy number. A rank index that accounts for both expected return and risk is defined, allowing the decision-maker to compare different portfolios. The paper ends with an application of that fuzzy ranking strategy to the Spanish stock market.
Portfolio performance evaluation with loss aversion
2011
In this paper we consider a loss-averse investor equipped with a specific, but still quite general, utility function motivated by behavioral finance. We show that, under certain concrete assumptions concerning the form of this utility, one can derive closed-form solutions for the investor's portfolio performance measure. We investigate the effects of loss aversion and demonstrate its important role in performance measurement. The framework presented in this paper also provides a sound theoretical foundation for all known performance measures based on partial moments of the distribution.
A computer program suitable for analysis of choice of categories in biomedical data recognition problems.
1980
The optimum choice of categories in problems of medical data recognition is governed by the choice of categories, the selection of appropriate features, and by the choice of a loss function. Under these circumstances it is often difficult to find out the suitable classification scheme. The computer program described here serves for the design of the optimum recognition procedure. The Bayes rule is used as decision rule. A criterion for the comparison of different choice of categories is given. The program can be performed after estimation of the underlying prior probabilities and the conditional densities obtained from a training set, and before testing the decision rule with real data.
An interactive approach to multiple criteria optimization with multiple decision-makers
1986
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…
The foundations of decision theory: An intuitive, operational approach with mathematical extensions
1985
A new axiomatic basis for the foundations of decision theory is introduced and its mathematical development outlined. The system combines direct intuitive operational appeal with considerable structural flexibility in the resulting mathematical framework.
A fuzzy decision support tool for demand forecasting
2007
In this paper we present a decision support forecasting system to work with univariate time series based on the generalized exponential smoothing (Holt-Winters) approach. It is conceived as an integrated tool which has been implemented in Visual Basic. For improving the accuracy of the automatic forecasting it uses an optimization-based scheme which unifies the stages of estimation of the parameters and selects the best method using a fuzzy multicriteria approach. The elements of the set of local minima of the non-linear programming problems allow us to build the membership functions of the conflicting objectives. A set of real data is analyzed to show the performance of our forecasting too…
Uncertainty Measures, Realizations and Entropies*
1997
This paper presents the axiomatic foundations of uncertainty theories arising in quantum theory and artificial intelligence. Plausibility measures and additive uncertainty measures are investigated. The representation of uncertainty measures by random sets in spaces of events forms a common base for the treatment of an appropriate integration theory as well as for a reasonable decision theory.
Exploring the future: Runtime scenario selection for complex and time-bound decisions
2015
Abstract Scenarios are designed to support decision-makers in gaining a better understanding of the consequences of decisions. Despite their popularity in IT for Foresight, a major obstacle is the complexity of strategic decisions and the resulting multitude of scenarios. Therefore choices need to be made, which scenarios to fully work out, by which experts and in which level of detail. This paper presents an approach to support making these trade-offs between accuracy and resources spent by prioritising scenarios based on their significance for the decision even on the basis of incomplete information. This approach combines theoretical findings in decision theory with results that were eli…
A note on preference for flexibility
2002
A result of Kreps (1979) on preference for flexibility is extended from two to three periods (formally from preferences over sets to preferences over sets of sets). An intuitively easier route to Kreps' original result is also presented, making the proof essentially ready for use in a decision theory class.