Behavioral multi-criteria decision analysis: the TODIM method with criteria interactions

In this paper a multi-criteria decision aiding model is developed through the use of the Choquet integral. The proposed model is an extension of the TODIM method, which is based on nonlinear Cumulative Prospect Theory. The paper starts by reviewing the first steps of behavioral decision theory. A pr...

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Bibliographic Details
Published in:Annals of operations research 2013-12, Vol.211 (1), p.531-548
Main Authors: Gomes, Luiz Flavio Autran Monteiro, Machado, Maria Augusta Soares, Rangel, Luis Alberto Duncan
Format: Article
Language:English
Subjects:
Behavior
Behavioral decision theory
Brazil
Business and Management
Combinatorics
Criteria
Decision analysis
Decision theory
Dominance
Expected utility
Fuzzy
Integrals
Multiple criteria decision making
Operations research
Operations Research/Decision Theory
Order disorder
Studies
Theory of Computation
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Summary:In this paper a multi-criteria decision aiding model is developed through the use of the Choquet integral. The proposed model is an extension of the TODIM method, which is based on nonlinear Cumulative Prospect Theory. The paper starts by reviewing the first steps of behavioral decision theory. A presentation of the TODIM method follows. The basic concepts of the Choquet integral as related to multi-criteria decision aiding are reviewed. It is also shown how the measures of dominance of the TODIM method can be rewritten through the application of the Choquet integral. From the ordering of decision criteria the fuzzy measures of criteria interactions are computed, which leads to the ranking of alternatives. A case study on the forecasting of property values for rent in a Brazilian city illustrates the proposed model. Results obtained from the use of the Choquet integral are then compared against a previously made usage of the TODIM method. It is concluded that significant advantages exist derived from the use of the Choquet integral. The paper closes with recommendations for future research.
ISSN:0254-5330
1572-9338
DOI:10.1007/s10479-013-1345-0