IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v236y2014i2p612-623.html
   My bibliography  Save this article

Approaches to multistage one-shot decision making

Author

Listed:
  • Guo, Peijun
  • Li, Yonggang

Abstract

In this research, multistage one-shot decision making under uncertainty is studied. In such a decision problem, a decision maker has one and only one chance to make a decision at each stage with possibilistic information. Based on the one-shot decision theory, approaches to multistage one-shot decision making are proposed. In the proposed approach, a decision maker chooses one state amongst all the states according to his/her attitude about satisfaction and possibility at each stage. The payoff at each stage is associated with the focus points at the succeeding stages. Based on the selected states (focus points), the sequence of optimal decisions is determined by dynamic programming. The proposed method is a fundamental alternative for multistage decision making under uncertainty because it is scenario-based instead of lottery-based as in the other existing methods. The one-shot optimal stopping problem is analyzed where a decision maker has only one chance to determine stopping or continuing at each stage. The theoretical results have been obtained.

Suggested Citation

  • Guo, Peijun & Li, Yonggang, 2014. "Approaches to multistage one-shot decision making," European Journal of Operational Research, Elsevier, vol. 236(2), pages 612-623.
    • Handle: RePEc:eee:ejores:v:236:y:2014:i:2:p:612-623
    DOI: 10.1016/j.ejor.2013.12.038
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221713010229
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2013.12.038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. R. E. Bellman & L. A. Zadeh, 1970. "Decision-Making in a Fuzzy Environment," Management Science, INFORMS, vol. 17(4), pages 141-164, December.
    2. Flapper, S.D.P. & Gayon, J.P. & Vercraene, S., 2012. "Control of a production–inventory system with returns under imperfect advance return information," European Journal of Operational Research, Elsevier, vol. 218(2), pages 392-400.
    3. Shapiro, Alexander & Tekaya, Wajdi & da Costa, Joari Paulo & Soares, Murilo Pereira, 2013. "Risk neutral and risk averse Stochastic Dual Dynamic Programming method," European Journal of Operational Research, Elsevier, vol. 224(2), pages 375-391.
    4. Peijun Guo, 2010. "Private Real Estate Investment Analysis within a One-Shot Decision Framework," International Real Estate Review, Global Social Science Institute, vol. 13(3), pages 238-260.
    5. Li, Dengfeng & Cheng, Chuntian, 2004. "Stability on multiobjective dynamic programming problems with fuzzy parameters in the objective functions and in the constraints," European Journal of Operational Research, Elsevier, vol. 158(3), pages 678-696, November.
    6. Daniel, Engelage, 2011. "Optimal stopping with dynamic variational preferences," Journal of Economic Theory, Elsevier, vol. 146(5), pages 2042-2074, September.
    7. Robert T. Clemen & Robert C. Kwit, 2001. "The Value of Decision Analysis at Eastman Kodak Company, 1990-1999," Interfaces, INFORMS, vol. 31(5), pages 74-92, October.
    8. Dubois, Didier & Prade, Henri & Sabbadin, Regis, 2001. "Decision-theoretic foundations of qualitative possibility theory," European Journal of Operational Research, Elsevier, vol. 128(3), pages 459-478, February.
    9. Chen, Xi & Ghate, Archis & Tripathi, Arvind, 2011. "Dynamic lot-sizing in sequential online retail auctions," European Journal of Operational Research, Elsevier, vol. 215(1), pages 257-267, November.
    10. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    11. Jukka Lempa, 2012. "Optimal stopping with random exercise lag," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 75(3), pages 273-286, June.
    12. Guo, Peijun & Tanaka, Hideo, 2003. "Decision analysis based on fused double exponential possibility distributions," European Journal of Operational Research, Elsevier, vol. 148(3), pages 467-479, August.
    13. Pal, Bijay Baran & Nath Moitra, Bhola, 2003. "A goal programming procedure for solving problems with multiple fuzzy goals using dynamic programming," European Journal of Operational Research, Elsevier, vol. 144(3), pages 480-491, February.
    14. Peijun Guo, 2010. "One-shot decision approach and its application to duopoly market," International Journal of Information and Decision Sciences, Inderscience Enterprises Ltd, vol. 2(3), pages 213-232.
    15. Minis, I. & Tatarakis, A., 2011. "Stochastic single vehicle routing problem with delivery and pick up and a predefined customer sequence," European Journal of Operational Research, Elsevier, vol. 213(1), pages 37-51, August.
    16. Mahayni, Antje & Schoenmakers, John G.M., 2011. "Minimum return guarantees with fund switching rights—An optimal stopping problem," Journal of Economic Dynamics and Control, Elsevier, vol. 35(11), pages 1880-1897.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Peijun & Ma, Xiuyan, 2014. "Newsvendor models for innovative products with one-shot decision theory," European Journal of Operational Research, Elsevier, vol. 239(2), pages 523-536.
    2. Xide Zhu & Peijun Guo, 2020. "Bilevel programming approaches to production planning for multiple products with short life cycles," 4OR, Springer, vol. 18(2), pages 151-175, June.
    3. Xide Zhu & Peijun Guo, 2017. "Approaches to four types of bilevel programming problems with nonconvex nonsmooth lower level programs and their applications to newsvendor problems," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 86(2), pages 255-275, October.
    4. Andrew J. Keith & Darryl K. Ahner, 2021. "A survey of decision making and optimization under uncertainty," Annals of Operations Research, Springer, vol. 300(2), pages 319-353, May.
    5. Xide Zhu & Kevin W. Li & Peijun Guo, 2023. "A bilevel optimization model for the newsvendor problem with the focus theory of choice," 4OR, Springer, vol. 21(3), pages 471-489, September.
    6. Guo, Peijun, 2019. "Focus theory of choice and its application to resolving the St. Petersburg, Allais, and Ellsberg paradoxes and other anomalies," European Journal of Operational Research, Elsevier, vol. 276(3), pages 1034-1043.
    7. Wang, Chao & Guo, Peijun, 2017. "Behavioral models for first-price sealed-bid auctions with the one-shot decision theory," European Journal of Operational Research, Elsevier, vol. 261(3), pages 994-1000.
    8. Xiuyan Ma, 2019. "Pricing to the Scenario: Price-Setting Newsvendor Models for Innovative Products," Mathematics, MDPI, vol. 7(9), pages 1-15, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guo, Peijun, 2019. "Focus theory of choice and its application to resolving the St. Petersburg, Allais, and Ellsberg paradoxes and other anomalies," European Journal of Operational Research, Elsevier, vol. 276(3), pages 1034-1043.
    2. Guo, Peijun, 2022. "Dynamic focus programming: A new approach to sequential decision problems under uncertainty," European Journal of Operational Research, Elsevier, vol. 303(1), pages 328-336.
    3. Guo, Peijun & Ma, Xiuyan, 2014. "Newsvendor models for innovative products with one-shot decision theory," European Journal of Operational Research, Elsevier, vol. 239(2), pages 523-536.
    4. Andrew J. Keith & Darryl K. Ahner, 2021. "A survey of decision making and optimization under uncertainty," Annals of Operations Research, Springer, vol. 300(2), pages 319-353, May.
    5. Xiuyan Ma, 2019. "Pricing to the Scenario: Price-Setting Newsvendor Models for Innovative Products," Mathematics, MDPI, vol. 7(9), pages 1-15, September.
    6. Mark D. Packard & Brent B. Clark & Peter G. Klein, 2017. "Uncertainty Types and Transitions in the Entrepreneurial Process," Organization Science, INFORMS, vol. 28(5), pages 840-856, October.
    7. Kangas, Annika S. & Kangas, Jyrki, 2004. "Probability, possibility and evidence: approaches to consider risk and uncertainty in forestry decision analysis," Forest Policy and Economics, Elsevier, vol. 6(2), pages 169-188, March.
    8. Shipley, Margaret F. & de Korvin, Andre & Omer, Khursheed, 2001. "A fuzzy logic-based decision model to satisfy goals for successful product/service introduction," European Journal of Operational Research, Elsevier, vol. 135(1), pages 209-219, November.
    9. Bilbao-Terol, Amelia & Arenas-Parra, Mar & Cañal-Fernández, Verónica, 2016. "A model based on Copula Theory for sustainable and social responsible investments," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 19(1), pages 55-76.
    10. Johanna Vásquez & Sergio Botero, 2020. "Hybrid Methodology to Improve Health Status Utility Values Derivation Using EQ-5D-5L and Advanced Multi-Criteria Techniques," IJERPH, MDPI, vol. 17(4), pages 1-18, February.
    11. Henn, Vincent & Ottomanelli, Michele, 2006. "Handling uncertainty in route choice models: From probabilistic to possibilistic approaches," European Journal of Operational Research, Elsevier, vol. 175(3), pages 1526-1538, December.
    12. Denis Bouyssou & Marc Pirlot, 2008. "On some ordinal models for decision making under uncertainty," Annals of Operations Research, Springer, vol. 163(1), pages 19-48, October.
    13. John W. Boudreau, 2004. "50th Anniversary Article: Organizational Behavior, Strategy, Performance, and Design in Management Science," Management Science, INFORMS, vol. 50(11), pages 1463-1476, November.
    14. Arora, S.R. & Gupta, Ritu, 2009. "Interactive fuzzy goal programming approach for bilevel programming problem," European Journal of Operational Research, Elsevier, vol. 194(2), pages 368-376, April.
    15. Xide Zhu & Peijun Guo, 2020. "Bilevel programming approaches to production planning for multiple products with short life cycles," 4OR, Springer, vol. 18(2), pages 151-175, June.
    16. Serkan Atmaca & Hacı Ahmet Karadaş, 2020. "Decision making on financial investment in Turkey by using ARDL long-term coefficients and AHP," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-22, December.
    17. Li, Shaoyuan & Hu, Chaofang, 2009. "Satisfying optimization method based on goal programming for fuzzy multiple objective optimization problem," European Journal of Operational Research, Elsevier, vol. 197(2), pages 675-684, September.
    18. Bilbao, A. & Arenas, M. & Rodriguez, M.V. & Antomil, J., 2007. "On constructing expert Betas for single-index model," European Journal of Operational Research, Elsevier, vol. 183(2), pages 827-847, December.
    19. Ho, Hui-Ping & Chang, Ching-Ter & Ku, Cheng-Yuan, 2015. "House selection via the internet by considering homebuyers’ risk attitudes with S-shaped utility functions," European Journal of Operational Research, Elsevier, vol. 241(1), pages 188-201.
    20. Alessandro Golkar & Edward F. Crawley, 2014. "A Framework for Space Systems Architecture under Stakeholder Objectives Ambiguity," Systems Engineering, John Wiley & Sons, vol. 17(4), pages 479-502, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:236:y:2014:i:2:p:612-623. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.