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Decision Making Under Risk: A Comparison of Bayesian and Fuzzy Set Methods

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  • James J. Buckley

Abstract

A classical decision problem is considered where a decision maker is to choose one of a number of actions each offering different consequences. The outcome from a choice of action is uncertain because it depends on the existing state of Nature. Also, the outcome, once an action and state of Nature are specified, may be a vector or a random vector. The decision maker employs both Bayesian methods and fuzzy set techniques to handle the uncertainties. The decision maker is also allowed to use multiple, possibly conflicting, goals in order to determine his best strategy. The Bayesian method produces a set of undominated strategies to choose from, whereas the fuzzy set technique usually produces a unique optimal strategy.

Suggested Citation

  • James J. Buckley, 1983. "Decision Making Under Risk: A Comparison of Bayesian and Fuzzy Set Methods," Risk Analysis, John Wiley & Sons, vol. 3(3), pages 157-168, September.
    • Handle: RePEc:wly:riskan:v:3:y:1983:i:3:p:157-168
    DOI: 10.1111/j.1539-6924.1983.tb00117.x
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    References listed on IDEAS

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    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. R. G. Cassidy & C. A. Field & M. J. L. Kirby, 1972. "Solution of a Satisficing Model for Random Payoff Games," Management Science, INFORMS, vol. 19(3), pages 266-271, November.
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    Cited by:

    1. Robert B. Cumming, 1985. "“Ambiguous Carcinogensrdquo;—Another Look," Risk Analysis, John Wiley & Sons, vol. 5(2), pages 157-159, June.

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