IDEAS home Printed from https://ideas.repec.org/a/spr/cejnor/v24y2016i4d10.1007_s10100-015-0427-2.html
   My bibliography  Save this article

Incremental analysis for generalized TODIM

Author

Listed:
  • Yuan-Sheng Lee

    (Tamkang University)

  • Hsu-Shih Shih

    (Tamkang University)

Abstract

This study aims to generalize TODIM to eliminate two types of scaling effects by incremental analysis. One effect is due to an inappropriate presentation of the losses part in S-shaped value function in traditional TODIM, in which the criteria with smaller weights will contribute larger dominance values in its computing process. The other effect is derived from aggregating partial dominance measurements among heterogeneous criteria in traditional TODIM (a Portuguese acronym of Interactive and Multi-criteria Decision Making). The proposed approach firstly divides the criteria into two categories, benefits and costs, each of which is manipulated separately so as to facilitate incremental analysis. For each category, the pairwise dominance of one alternative is accumulated and normalized to represent the global dominance of each alternative. The global dominance measurements of alternatives in both categories are then combined according to benefit-cost ratio in order to rank alternatives. In addition, sensitivity analyses on the parameters of the gains/losses value function and the cutoff benefit-cost ratio demonstrate the robustness of the proposed model. An example of the selection of fuel buses is illustrated, and shows that our model is feasible and effective for MCDM problems with risk preference.

Suggested Citation

  • Yuan-Sheng Lee & Hsu-Shih Shih, 2016. "Incremental analysis for generalized TODIM," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(4), pages 901-922, December.
  • Handle: RePEc:spr:cejnor:v:24:y:2016:i:4:d:10.1007_s10100-015-0427-2
    DOI: 10.1007/s10100-015-0427-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10100-015-0427-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10100-015-0427-2?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. 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..
    2. Quiggin, John, 1993. "Testing between Alternative Models of Choice under Uncertainty: Comment," Journal of Risk and Uncertainty, Springer, vol. 6(2), pages 161-164, April.
    3. George Wu & Richard Gonzalez, 1996. "Curvature of the Probability Weighting Function," Management Science, INFORMS, vol. 42(12), pages 1676-1690, December.
    4. Mohammed Abdellaoui & Han Bleichrodt & Corina Paraschiv, 2007. "Loss Aversion Under Prospect Theory: A Parameter-Free Measurement," Management Science, INFORMS, vol. 53(10), pages 1659-1674, October.
    5. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    6. Luiz Gomes & Maria Machado & Luis Rangel, 2013. "Behavioral multi-criteria decision analysis: the TODIM method with criteria interactions," Annals of Operations Research, Springer, vol. 211(1), pages 531-548, December.
    7. Luiz Gomes & Maria Machado & Xavier Gonzalez & Luis Rangel, 2013. "Erratum to: Behavioral multi-criteria decision analysis: the TODIM method with criteria interactions," Annals of Operations Research, Springer, vol. 211(1), pages 529-529, December.
    8. Shih, Hsu-Shih, 2008. "Incremental analysis for MCDM with an application to group TOPSIS," European Journal of Operational Research, Elsevier, vol. 186(2), pages 720-734, April.
    9. Yigit Kazancoglu & Serhat Burmaoglu, 2013. "ERP software selection with MCDM: application of TODIM method," International Journal of Business Information Systems, Inderscience Enterprises Ltd, vol. 13(4), pages 435-452.
    10. Autran Monteiro Gomes, Luiz Flávio & Duncan Rangel, LuI´s Alberto, 2009. "An application of the TODIM method to the multicriteria rental evaluation of residential properties," European Journal of Operational Research, Elsevier, vol. 193(1), pages 204-211, February.
    11. Tzeng, Gwo-Hshiung & Lin, Cheng-Wei & Opricovic, Serafim, 2005. "Multi-criteria analysis of alternative-fuel buses for public transportation," Energy Policy, Elsevier, vol. 33(11), pages 1373-1383, July.
    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. Dongsheng Xu & Xiaolan Wei & Hui Ding & Hongqiong Bin, 2020. "A New Method Based on PROMETHEE and TODIM for Multi-Attribute Decision-Making with Single-Valued Neutrosophic Sets," Mathematics, MDPI, vol. 8(10), pages 1-12, October.
    2. Leoneti, Alexandre Bevilacqua & Gomes, Luiz Flavio Autran Monteiro, 2021. "A novel version of the TODIM method based on the exponential model of prospect theory: The ExpTODIM method," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1042-1055.
    3. Leoneti, Alexandre Bevilacqua & Gomes, Luiz Flavio Autran Monteiro, 2021. "Modeling multicriteria group decision making as games from enhanced pairwise comparisons," Operations Research Perspectives, Elsevier, vol. 8(C).
    4. Llamazares, Bonifacio, 2018. "An analysis of the generalized TODIM method," European Journal of Operational Research, Elsevier, vol. 269(3), pages 1041-1049.

    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. Llamazares, Bonifacio, 2018. "An analysis of the generalized TODIM method," European Journal of Operational Research, Elsevier, vol. 269(3), pages 1041-1049.
    2. Ulrich Schmidt & Horst Zank, 2008. "Risk Aversion in Cumulative Prospect Theory," Management Science, INFORMS, vol. 54(1), pages 208-216, January.
    3. D. A. Peel & Jie Zhang & D. Law, 2008. "The Markowitz model of utility supplemented with a small degree of probability distortion as an explanation of outcomes of Allais experiments over large and small payoffs and gambling on unlikely outc," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 17-26.
    4. Jakusch, Sven Thorsten & Meyer, Steffen & Hackethal, Andreas, 2019. "Taming models of prospect theory in the wild? Estimation of Vlcek and Hens (2011)," SAFE Working Paper Series 146, Leibniz Institute for Financial Research SAFE, revised 2019.
    5. Víctor González-Jiménez, 2021. "Incentive contracts when agents distort probabilities," Vienna Economics Papers vie2101, University of Vienna, Department of Economics.
    6. Dierkes, Maik & Erner, Carsten & Zeisberger, Stefan, 2010. "Investment horizon and the attractiveness of investment strategies: A behavioral approach," Journal of Banking & Finance, Elsevier, vol. 34(5), pages 1032-1046, May.
    7. Peter Brooks & Simon Peters & Horst Zank, 2014. "Risk behavior for gain, loss, and mixed prospects," Theory and Decision, Springer, vol. 77(2), pages 153-182, August.
    8. Mohammed Abdellaoui & Olivier L'Haridon & Corina Paraschiv, 2011. "Experienced vs. Described Uncertainty: Do We Need Two Prospect Theory Specifications?," Management Science, INFORMS, vol. 57(10), pages 1879-1895, October.
    9. Olivier Toubia & Eric Johnson & Theodoros Evgeniou & Philippe Delquié, 2013. "Dynamic Experiments for Estimating Preferences: An Adaptive Method of Eliciting Time and Risk Parameters," Management Science, INFORMS, vol. 59(3), pages 613-640, June.
    10. Nguyen, Quang, 2009. "Do fishermen have different preferences?: Insights from an experimental study and household data," MPRA Paper 16012, University Library of Munich, Germany.
    11. Adam Booij & Bernard Praag & Gijs Kuilen, 2010. "A parametric analysis of prospect theory’s functionals for the general population," Theory and Decision, Springer, vol. 68(1), pages 115-148, February.
    12. James S. Dyer & James E. Smith, 2021. "Innovations in the Science and Practice of Decision Analysis: The Role of Management Science," Management Science, INFORMS, vol. 67(9), pages 5364-5378, September.
    13. Laurent Denant-Boemont & Olivier L’Haridon, 2013. "La rationalité à l'épreuve de l'économie comportementale," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 35-89.
    14. Alex Markle & George Wu & Rebecca White & Aaron Sackett, 2018. "Goals as reference points in marathon running: A novel test of reference dependence," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 19-50, February.
    15. Shuoli Zhao & Chengyan Yue, 2020. "Risk preferences of commodity crop producers and specialty crop producers: An application of prospect theory," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 359-372, May.
    16. Kairies-Schwarz, Nadja & Kokot, Johanna & Vomhof, Markus & Weßling, Jens, 2017. "Health insurance choice and risk preferences under cumulative prospect theory – an experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 374-397.
    17. Víctor González-Jiménez, 2021. "Incentive contracts when agents distort probabilities," Vienna Economics Papers 2101, University of Vienna, Department of Economics.
    18. Peon, David & Calvo, Anxo & Antelo, Manel, 2014. "A short-but-efficient test for overconfidence and prospect theory. Experimental validation," MPRA Paper 54135, University Library of Munich, Germany.
    19. M. Levy, 2010. "Loss aversion and the price of risk," Quantitative Finance, Taylor & Francis Journals, vol. 10(9), pages 1009-1022.
    20. Horst Zank, 2010. "On probabilities and loss aversion," Theory and Decision, Springer, vol. 68(3), pages 243-261, March.

    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:spr:cejnor:v:24:y:2016:i:4:d:10.1007_s10100-015-0427-2. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.