Decisions with Multiple Objectives

Preface to the Cambridge University Press Edition xi
Preface to First Edition xv

1. THE PROBLEM 1
1.1 Sketches of Motivating Examples 1
1.2 Paradigm of Decision Analysis 5
1.3 Comments About the Paradigm 7
1.4 Complex Value Problems 14
1.5 Classes of Examples and Methodological Nightmares 19
1.6 Organization of Remaining Chapters 26

2. THE STRUCTURING OF OBJECTIVES 31
2.1 Objectives and Attributes 32
2.2 Generation of Objectives and Attributes 34
2.3 Hierarchical Nature of Objectives 41
2.4 Sets of Objectives and Attributes 49
2.5 Proxy Attributes and Direct Preference Measurements 55
2.6 Summary and Perspective on the Practical Aspects of Specifying Objectives and Attributes 64

3. TRADEOFFS UNDER CERTAINTY 66
3.1 The Multiattribute Value Problem 66
3.2 Choice Procedures That Do Not Formalize Preference Structures 69
3.3 Structuring of Preferences and Value Functions 77
3.4 Preference Structures and Value Functions for Two Attributes 82
3.5 The Case of Three Attributes 100
3.6 The Case of More Than Three Attributes 108
3.7 Assessment of an Additive Value Function: An Abstract Hypothetical Example 117
3.8 Willingness to Pay 125
3.9 Brief Summary and Guide to Some Relevant Literature 129

4. UNIDIMENSIONAL UTILITY THEORY 131
4.1 The Motivation for Utility Theory 131
4.2 Direct Assessment of Utilities for Consequences 140
4.3 Unidimensional Utility Functions 141
4.4 Risk Aversion 148
4.5 A Measure of Risk Aversion 159
4.6 Constant, Decreasing, and Increasing Risk Aversion 165
4.7 Proportional Risk Aversion 174
4.8 Monotonically Decreasing and Nonmonotonic Utility Functions 179
4.9 A Procedure for Assessing Utility Functions 188
4.10 lUustrations of the Assessment of Unidimensional Utility Functions 203
4.11 Explicating a Single Attribute by Means of Multiple Attributes 212
4.12 Conditional Unidimensional Utility Theory 214
4.13 Where We Stand 218

5. MULTIATTRIBUTE PREFERENCES UNDER UNCERTAINTY: THE TWO-ATTRIBUTE CASE 219
5.1 Approaches for Multiattribute Assessment 219
5.2 Utility Independence 224
5.3 Additive Independence and the Additive Utility Function 229
5.4 The Implications of Mutual Utility Independence 232
5.5 Use of Certainty Equivalents 242
5.6 Utility Functions with One Utility-Independent Attribute 243
5.7 What to Do if No Independence Properties Hold 255
5.8 Assessment Procedure for Mulitattribute Utility Functions 261
5.9 Interpreting the Scaling Constants 271
5.10 The Assessment of a Utility Function in a Hospital Blood Bank 273

6. MULTIATTRIBUTE PREFERENCES UNDER UNCERTAINTY: MORE THAN TWO ATTRIBUTES 282
6.1 Overview of the Chapter 282
6.2 Utility Functions with Three Attributes 286