Authors: Ram Kumar Dhurkari
Addresses: IS and Operations Department, Institute for Financial Management and Research (IFMR) Chennai, 5655 Central Express way, Sector 24, Sricity, Chittoor 517541, Aandhra Pradesh, India
Abstract: This paper proposes a method for discrete alternative multi-criteria decision making (MCDM) under certainty. The proposed method (multi-criteria gain loss: MCGL) is based upon the tenets of prospect theory and norm theory. The two major objectives for the development of the MCGL method are: 1) to reduce the complexity of the MCDM in order to improve the performance of the decision maker (DM) in the process of judgement; 2) to use some of the latest descriptive theories of decision making in order to improve the effectiveness of the MCDM method in terms of its resemblance with actual decisions. Two studies conducted to test the effectiveness of the proposed method in resembling actual or real decisions. In comparison to the analytic hierarchy process (AHP), the MCGL method is able to capture individual's decision-making process more accurately. Applicability measures like the number of decisions required, time and the cognitive burden strongly favours the MCGL method.
Keywords: multi-criteria decision making; MCDM; prospect theory; analytic hierarchy process; AHP.
International Journal of Operational Research, 2019 Vol.36 No.4, pp.477 - 495
Received: 23 Mar 2016
Accepted: 16 Dec 2016
Published online: 07 Dec 2019 *