IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2504.16093.html
   My bibliography  Save this paper

Efficient Portfolio Selection through Preference Aggregation with Quicksort and the Bradley--Terry Model

Author

Listed:
  • Yurun Ge
  • Lucas Bottcher
  • Tom Chou
  • Maria R. D'Orsogna

Abstract

How to allocate limited resources to projects that will yield the greatest long-term benefits is a problem that often arises in decision-making under uncertainty. For example, organizations may need to evaluate and select innovation projects with risky returns. Similarly, when allocating resources to research projects, funding agencies are tasked with identifying the most promising proposals based on idiosyncratic criteria. Finally, in participatory budgeting, a local community may need to select a subset of public projects to fund. Regardless of context, agents must estimate the uncertain values of a potentially large number of projects. Developing parsimonious methods to compare these projects, and aggregating agent evaluations so that the overall benefit is maximized, are critical in assembling the best project portfolio. Unlike in standard sorting algorithms, evaluating projects on the basis of uncertain long-term benefits introduces additional complexities. We propose comparison rules based on Quicksort and the Bradley--Terry model, which connects rankings to pairwise "win" probabilities. In our model, each agent determines win probabilities of a pair of projects based on his or her specific evaluation of the projects' long-term benefit. The win probabilities are then appropriately aggregated and used to rank projects. Several of the methods we propose perform better than the two most effective aggregation methods currently available. Additionally, our methods can be combined with sampling techniques to significantly reduce the number of pairwise comparisons. We also discuss how the Bradley--Terry portfolio selection approach can be implemented in practice.

Suggested Citation

  • Yurun Ge & Lucas Bottcher & Tom Chou & Maria R. D'Orsogna, 2025. "Efficient Portfolio Selection through Preference Aggregation with Quicksort and the Bradley--Terry Model," Papers 2504.16093, arXiv.org.
  • Handle: RePEc:arx:papers:2504.16093
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2504.16093
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Carlos Alós-Ferrer & Johannes Buckenmaier, 2021. "Voting for compromises: alternative voting methods in polarized societies," ECON - Working Papers 394, Department of Economics - University of Zurich.
    2. Felipe A. Csaszar & J. P. Eggers, 2013. "Organizational Decision Making: An Information Aggregation View," Management Science, INFORMS, vol. 59(10), pages 2257-2277, October.
    3. Zopounidis, Constantin & Doumpos, Michael, 2002. "Multicriteria classification and sorting methods: A literature review," European Journal of Operational Research, Elsevier, vol. 138(2), pages 229-246, April.
    4. Gerdus Benadè & Swaprava Nath & Ariel D. Procaccia & Nisarg Shah, 2021. "Preference Elicitation for Participatory Budgeting," Management Science, INFORMS, vol. 67(5), pages 2813-2827, May.
    5. Joshua C. Yang & Carina I. Hausladen & Dominik Peters & Evangelos Pournaras & Regula Hanggli Fricker & Dirk Helbing, 2023. "Designing Digital Voting Systems for Citizens: Achieving Fairness and Legitimacy in Participatory Budgeting," Papers 2310.03501, arXiv.org, revised Mar 2024.
    6. Lucas Bottcher & Ronald Klingebiel, 2024. "Organizational Selection of Innovation," Papers 2405.09843, arXiv.org.
    7. Edith Elkind & Piotr Faliszewski & Piotr Skowron & Arkadii Slinko, 2017. "Properties of multiwinner voting rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(3), pages 599-632, March.
    8. Carina I. Hausladen & Regula Hänggli Fricker & Dirk Helbing & Renato Kunz & Junling Wang & Evangelos Pournaras, 2024. "How voting rules impact legitimacy," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    Full references (including those not matched with items on IDEAS)

    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. Joshua C. Yang & Damian Dailisan & Marcin Korecki & Carina I. Hausladen & Dirk Helbing, 2024. "LLM Voting: Human Choices and AI Collective Decision Making," Papers 2402.01766, arXiv.org, revised Aug 2024.
    2. Andrea C. Hupman & Jay Simon, 2023. "The Legacy of Peter Fishburn: Foundational Work and Lasting Impact," Decision Analysis, INFORMS, vol. 20(1), pages 1-15, March.
    3. Yurun Ge & Lucas Bottcher & Tom Chou & Maria R. D'Orsogna, 2024. "A knapsack for collective decision-making," Papers 2409.13236, arXiv.org.
    4. Gupta, Pankaj & Mittal, Garima & Mehlawat, Mukesh Kumar, 2013. "Expected value multiobjective portfolio rebalancing model with fuzzy parameters," Insurance: Mathematics and Economics, Elsevier, vol. 52(2), pages 190-203.
    5. Nima Mirzaei & Béla Vizvári, 2015. "A New Approach to Reconstruction of Moody’s Rating System for Countries Investment Risk Rating," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(3), pages 167-182.
    6. Doumpos, M. & Marinakis, Y. & Marinaki, M. & Zopounidis, C., 2009. "An evolutionary approach to construction of outranking models for multicriteria classification: The case of the ELECTRE TRI method," European Journal of Operational Research, Elsevier, vol. 199(2), pages 496-505, December.
    7. David McCune & Erin Martin & Grant Latina & Kaitlyn Simms, 2023. "A Comparison of Sequential Ranked-Choice Voting and Single Transferable Vote," Papers 2306.17341, arXiv.org.
    8. Carina I. Hausladen & Regula Hänggli Fricker & Dirk Helbing & Renato Kunz & Junling Wang & Evangelos Pournaras, 2024. "How voting rules impact legitimacy," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    9. Haris Aziz & Sujit Gujar & Manisha Padala & Mashbat Suzuki & Jeremy Vollen, 2022. "Coordinating Monetary Contributions in Participatory Budgeting," Papers 2206.05966, arXiv.org, revised Feb 2023.
    10. Bouyssou, Denis & Marchant, Thierry, 2007. "An axiomatic approach to noncompensatory sorting methods in MCDM, II: More than two categories," European Journal of Operational Research, Elsevier, vol. 178(1), pages 246-276, April.
    11. Markus Brill & Jean-François Laslier & Piotr Skowron, 2018. "Multiwinner approval rules as apportionment methods," Journal of Theoretical Politics, , vol. 30(3), pages 358-382, July.
    12. Felipe A. Csaszar & Daniel A. Levinthal, 2016. "Mental representation and the discovery of new strategies," Strategic Management Journal, Wiley Blackwell, vol. 37(10), pages 2031-2049, October.
    13. Ju, Keyi & Su, Bin & Zhou, Dequn & Zhang, Yuqiang, 2016. "An incentive-oriented early warning system for predicting the co-movements between oil price shocks and macroeconomy," Applied Energy, Elsevier, vol. 163(C), pages 452-463.
    14. Ana Sara Costa & Isabella M. Lami & Salvatore Greco & José Rui Figueira & José Borbinha, 2021. "Assigning a house for refugees: an application of a multiple criteria nominal classification method," Operational Research, Springer, vol. 21(4), pages 2651-2687, December.
    15. Andrea Aveni & Ludovico Crippa & Giulio Principi, 2024. "On the Weighted Top-Difference Distance: Axioms, Aggregation, and Approximation," Papers 2403.15198, arXiv.org, revised Mar 2024.
    16. Pegdwendé Minoungou & Vincent Mousseau & Wassila Ouerdane & Paolo Scotton, 2023. "A MIP-based approach to learn MR-Sort models with single-peaked preferences," Annals of Operations Research, Springer, vol. 325(2), pages 795-817, June.
    17. Mostapha Diss & Eric Kamwa & Abdelmonaim Tlidi, 2019. "On some k-scoring rules for committee elections: agreement and Condorcet Principle," Working Papers hal-02147735, HAL.
    18. Govindan, Kannan & Jepsen, Martin Brandt, 2016. "ELECTRE: A comprehensive literature review on methodologies and applications," European Journal of Operational Research, Elsevier, vol. 250(1), pages 1-29.
    19. Sueyoshi, Toshiyuki, 2006. "DEA-Discriminant Analysis: Methodological comparison among eight discriminant analysis approaches," European Journal of Operational Research, Elsevier, vol. 169(1), pages 247-272, February.
    20. Diss, Mostapha & Mahajne, Muhammad, 2020. "Social acceptability of Condorcet committees," Mathematical Social Sciences, Elsevier, vol. 105(C), pages 14-27.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:arx:papers:2504.16093. 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.