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Using expected values to simplify decision making under uncertainty

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Author Info
Durbach, Ian N.
Stewart, Theodor J.
Abstract

A simulation study examines the impact of a simplification strategy that replaces distributional attribute evaluations with their expected values and uses those expectations in an additive value model. Several alternate simplified forms and approximation approaches are investigated, with results showing that in general the simplified models are able to provide acceptable performance that is fairly robust to a variety of internal and external environmental changes, including changes to the distributional forms of the attribute evaluations, errors in the assessment of the expected values, and problem size. Certain of the simplified models are shown to be highly sensitive to the form of the underlying preference functions, and in particular to extreme non-linearity in these preferences.

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File URL: http://www.sciencedirect.com/science/article/B6VC4-4N4J33G-1/2/02122283d9cca0a7c767a8b61c6c34da
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Publisher Info
Article provided by Elsevier in its journal Omega.

Volume (Year): 37 (2009)
Issue (Month): 2 (April)
Pages: 312-330
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Handle: RePEc:eee:jomega:v:37:y:2009:i:2:p:312-330

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Keywords: Multicriteria Risk Decision process Simulation;

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This page was last updated on 2009-12-3.


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