Dynamic Stochastic Multi-Criteria Decision Making Method Based on Prospect Theory and Conjoint Analysis

Junhua HU, Peng CHEN, Liu YANG

Abstract


A method based on prospect theory and conjoint analysis is proposed for dynamic stochastic multi-criteria decision making problems, in which the information about criteria weight is unknown and criteria values follow some kinds of distributions. Decision-maker’s attitude towards risk is introduced into this paper. First, data is collected by investigation and criteria weights are derived by conjoint analysis. The prospect values of each alternative in different periods are calculated according to distribution function. Then, index distribution decides time sequence weight, and overall prospect values of each alternative are obtained and ranked by aggregating prospect values in different periods. Finally, an example of choosing the best product illustrates the feasibility and effectiveness of this method.


Keywords


Dynamic stochastic; Multi-criteria decision making; Prospect theory; Conjoint analysis

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References


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DOI: http://dx.doi.org/10.3968/5235

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