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A re-examination of the algebraic properties of the AHP as a ratio-scaling technique

Author

Listed:
  • Michele Bernasconi

    (Department of Economics, University Of Venice C� Foscari)

  • Christine Choirat

    (Department of Quantitative Methods, School of Economics and Business Management, Universidad de Navarra.)

  • Raffaello Seri

    (Dipartimento di Economia, Universit� dell'Insubria.)

Abstract

The Analytic Hierarchy Process (AHP) ratio-scaling approach is re-examined in view of the recent developments in mathematical psychology based on the so-called separable representations. The study highlights the distortions in the estimates based on the maximum eigenvalue method used in the AHP distinguishing the contributions due to random noises from the effects due to the nonlinearity of the subjective weighting function of separable representations. The analysis is based on the second order expansion of the Perron eigenvector and Perron eigenvalue in reciprocally symmetric matrices with perturbations. The asymptotic distributions of the Perron eigenvector and Perron eigenvalue are derived and related to the eigenvalue-based index of cardinal consistency used in the AHP. The results show the limits of using the latter index as a rule to assess the quality of the estimates of a ratio scale. The AHP method to estimate the ratio scales is compared with the classical ratio magnitude approach used in psychophysics.

Suggested Citation

  • Michele Bernasconi & Christine Choirat & Raffaello Seri, 2009. "A re-examination of the algebraic properties of the AHP as a ratio-scaling technique," Working Papers 2009_23, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2009_23
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    References listed on IDEAS

    as
    1. Thomas L. Saaty, 1986. "Axiomatic Foundation of the Analytic Hierarchy Process," Management Science, INFORMS, vol. 32(7), pages 841-855, July.
    2. Michele Bernasconi & Christine Choirat & Raffaello Seri, 2010. "The Analytic Hierarchy Process and the Theory of Measurement," Management Science, INFORMS, vol. 56(4), pages 699-711, April.
    3. Drazen Prelec, 1998. "The Probability Weighting Function," Econometrica, Econometric Society, vol. 66(3), pages 497-528, May.
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    Cited by:

    1. Bernasconi, Michele & Choirat, Christine & Seri, Raffaello, 2014. "Empirical properties of group preference aggregation methods employed in AHP: Theory and evidence," European Journal of Operational Research, Elsevier, vol. 232(3), pages 584-592.
    2. Talaei, Alireza & Ahadi, Mohammad Sadegh & Maghsoudy, Soroush, 2014. "Climate friendly technology transfer in the energy sector: A case study of Iran," Energy Policy, Elsevier, vol. 64(C), pages 349-363.
    3. Raffaello Seri & Samuele Centorrino & Michele Bernasconi, 2019. "Nonparametric Estimation and Inference in Economic and Psychological Experiments," Papers 1904.11156, arXiv.org, revised Dec 2019.

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    More about this item

    Keywords

    Separable representations; reciprocally symmetric matrices; consistency indexes.;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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