A Study of Behavioral Considerations based on Prospect Theory for Group Decision Making

Abstract

For managing the behavioral effect of the risk preference of decision makers (DMs) in a group decision, this study adapts the TODIM (an acronym in Portuguese of Interactive and Multi-criteria Decision Making) to deal with risk decision and combines with incremental analysis (IA) and group ranks to construct an integrated multi-criteria group decision support model. In consideration of the ordinal rank of each DM using IA and the relative weights of DMs, the approaches for converting the ordinal data to cardinal data and determining the weights of DMs based on the eigenvector of their ranking distance comparison matrix are also compared and discussed. Furthermore, sensitivity analyses of the parameters of the value function and different weights of DMs demonstrate the robustness of the integrated model. An example proves the proposed model to be feasible.