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Multiple Attribute Decision Making With Multiple Formats Of Attribute Aspirations: A Method Based On Prospect Theory

Author

Listed:
  • ZHI-PING FAN

    (Department of Management Science and Engineering, School of Business Administration, Northeastern University, Shenyang, 110819, China)

  • XIAO ZHANG

    (Department of Management Science and Engineering, School of Business Administration, Northeastern University, Shenyang, 110819, China;
    Department of Industrial Engineering, School of Economics & Management, Xi Dian University, Xi'an, 710071, China)

  • YAN-RU ZHAO

    (Department of Management Science and Engineering, School of Business Administration, Northeastern University, Shenyang, 110819, China)

  • FA-DONG CHEN

    (Department of Economics, University of Konstanz, Konstanz, 78457, Germany)

Abstract

In this paper, a method based on prospect theory is proposed to solve the multiple attribute decision making (MADM) problem with three formats of attribute aspirations. According to the idea of prospect theory, reference points concerning attributes are first determined. Then, for the three formats of attribute aspirations, the calculation formulae of alternatives' gains/losses concerning attributes are given. By calculating each alternative's gain/loss, a gain–loss matrix is constructed. Further, using the value function from prospect theory and the simple additive weighting method, the overall prospect value of each alternative is calculated. Based on the obtained overall prospect values, a ranking of alternatives can be determined. Finally, a case study is given to illustrate the use of the proposed method.

Suggested Citation

  • Zhi-Ping Fan & Xiao Zhang & Yan-Ru Zhao & Fa-Dong Chen, 2013. "Multiple Attribute Decision Making With Multiple Formats Of Attribute Aspirations: A Method Based On Prospect Theory," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 711-727.
    • Handle: RePEc:wsi:ijitdm:v:12:y:2013:i:04:n:s0219622013500260
    DOI: 10.1142/S0219622013500260
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    Citations

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    Cited by:

    1. Shuli Liu & Xinwang Liu, 2016. "A Sample Survey Based Linguistic MADM Method with Prospect Theory for Online Shopping Problems," Group Decision and Negotiation, Springer, vol. 25(4), pages 749-774, July.
    2. Dong Cheng & Yong Wu & Yuxiang Yuan & Faxin Cheng & Dianwei Chen, 2024. "Modeling the Maximum Perceived Utility Consensus Based on Prospect Theory," Group Decision and Negotiation, Springer, vol. 33(5), pages 951-975, October.
    3. Aleksandra Król & Jerzy Księżak & Elżbieta Kubińska & Stelios Rozakis, 2018. "Evaluation of Sustainability of Maize Cultivation in Poland. A Prospect Theory—PROMETHEE Approach," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    4. Xiaonan Ji & Lixia Yu & Jiapei Fu, 2019. "Evaluating Personal Default Risk in P2P Lending Platform: Based on Dual Hesitant Pythagorean Fuzzy TODIM Approach," Mathematics, MDPI, vol. 8(1), pages 1-14, December.
    5. Jian-Wu Bi & Tian-Yu Han & Yanbo Yao & Hui Li, 2022. "Ranking hotels through multi-dimensional hotel information: a method considering travelers’ preferences and expectations," Information Technology & Tourism, Springer, vol. 24(1), pages 127-155, March.
    6. Kubińska, Elżbieta & Adamczyk-Kowalczuk, Magdalena & Andrzejewski, Mariusz & Rozakis, Stelios, 2022. "Incorporating the status quo effect into the decision making process: The case of municipal companies merger," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    7. Song, Yongming & Li, Guangxu & Li, Tie & Li, Yanhong, 2021. "A purchase decision support model considering consumer personalization about aspirations and risk attitudes," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).

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