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Finding better alternatives than those considered in a multiple criteria data sample

Author

Listed:
  • Ankur Sinha

    (Indian Institute of Management)

  • Pekka Korhonen

    (Aalto University School of Business)

  • Jyrki Wallenius

    (Aalto University School of Business)

Abstract

This paper suggests a preference-based method to calculate the probability of finding a better alternative than the ones present in the original data sample. Such a procedure would be useful, for example, while selecting among job applicants, where each individual is evaluated in terms of multiple criteria. Once the evaluation of individuals is done, the efficient (non-dominated) individuals from the sample are identified and the most preferred candidate is chosen. However, it is often useful to assess the probability of finding even better candidates, were more applications invited. In this paper, we suggest a generic method to ascertain this probability, which can be used as a criterion to terminate the search for the most preferred alternative. This is achieved by estimating the value function of the decision maker in terms of different criteria. If a linear value function cannot be fitted, we suggest a novel approach to test more general functions in a stepwise manner.

Suggested Citation

  • Ankur Sinha & Pekka Korhonen & Jyrki Wallenius, 2016. "Finding better alternatives than those considered in a multiple criteria data sample," Journal of Business Economics, Springer, vol. 86(1), pages 35-54, January.
    • Handle: RePEc:spr:jbecon:v:86:y:2016:i:1:d:10.1007_s11573-015-0787-z
    DOI: 10.1007/s11573-015-0787-z
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    References listed on IDEAS

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    1. Pekka Korhonen & Herbert Moskowitz & Pekka Salminen & Jyrki Wallenius, 1993. "Further Developments and Tests of a Progressive Algorithm for Multiple Criteria Decision Making," Operations Research, INFORMS, vol. 41(6), pages 1033-1045, December.
    2. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, Decembrie.
    3. Stanley Zionts & Jyrki Wallenius, 1983. "An Interactive Multiple Objective Linear Programming Method for a Class of Underlying Nonlinear Utility Functions," Management Science, INFORMS, vol. 29(5), pages 519-529, May.
    4. Stanley Zionts & Jyrki Wallenius, 1976. "An Interactive Programming Method for Solving the Multiple Criteria Problem," Management Science, INFORMS, vol. 22(6), pages 652-663, February.
    5. Pekka Korhonen & Herbert Moskowitz & Jyrki Wallenius, 1986. "A Progressive Algorithm for Modeling and Solving Multiple-Criteria Decision Problems," Operations Research, INFORMS, vol. 34(5), pages 726-731, October.
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