A Study of Decision-making Model Considering Priorities based on Two Kinds of Evaluation - Decision Making Methodology Applying Risk Evaluation based on Prospect Theory

Rumiko Azuma, Shinya Nozaki

Abstract

The Analytic Hierarchy Process (AHP) is a multi-criteria decision-making approach aimed at reflecting a human’s subjective judgment or vagueness. The conventional evaluation in AHP is considered to be a kind of utility. However, there are some cases where the traditional utility theory cannot explain risk aversion. This paper presents a new decision-making methodology for considering risk evaluation. We propose the hierarchy model that contains return and risk categories, and an AHP method that applies prospect theory, which is able to explain people’s decisions when they face situations involving risks. Therefore, by proposing an AHP method that utilizes it, we enable the evaluation of alternatives under return and risk.

References

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Paper Citation


in Harvard Style

Azuma R. and Nozaki S. (2013). A Study of Decision-making Model Considering Priorities based on Two Kinds of Evaluation - Decision Making Methodology Applying Risk Evaluation based on Prospect Theory . In Proceedings of the 5th International Conference on Agents and Artificial Intelligence - Volume 2: ICAART, ISBN 978-989-8565-39-6, pages 555-558. DOI: 10.5220/0004326605550558


in Bibtex Style

@conference{icaart13,
author={Rumiko Azuma and Shinya Nozaki},
title={A Study of Decision-making Model Considering Priorities based on Two Kinds of Evaluation - Decision Making Methodology Applying Risk Evaluation based on Prospect Theory},
booktitle={Proceedings of the 5th International Conference on Agents and Artificial Intelligence - Volume 2: ICAART,},
year={2013},
pages={555-558},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0004326605550558},
isbn={978-989-8565-39-6},
}


in EndNote Style

TY - CONF
JO - Proceedings of the 5th International Conference on Agents and Artificial Intelligence - Volume 2: ICAART,
TI - A Study of Decision-making Model Considering Priorities based on Two Kinds of Evaluation - Decision Making Methodology Applying Risk Evaluation based on Prospect Theory
SN - 978-989-8565-39-6
AU - Azuma R.
AU - Nozaki S.
PY - 2013
SP - 555
EP - 558
DO - 10.5220/0004326605550558