Analog scale,magnitude estimation,and person trade‐off as measures of health utility: biases and their correction

Subjects judged the disutility of health conditions (e.g. blindness) using one of them (e.g. blindness+deafness) as a standard, using three elicitation methods: analog scale (AS, how bad is blindness compared to blindness+deafness?); magnitude estimation (ME, blindness+deafness is how many times as bad as blindness?); and person trade‐off (PTO, how many people cured of blindness is as good as 10 people cured of blindness+deafness?). ME disutilities of the less bad condition were smallest, and AS was highest. Interleaving PTO with ME made PTO more like ME. AS disutilities were inconsistent with direct judgments of differences between pairs of conditions. ME and PTO judgments were internally inconsistent: e.g. the disutility of one‐eye‐blindness relative to blindness+deafness was larger than predicted from comparison of each to blindness. Consistency training reduced inconsistency, increased agreement between AS and PTO, and transferred from one method to the other. The results support the use of consistency checks in utility elicitation. Copyright © 2001 John Wiley & Sons, Ltd.     

Investigating the roots of the favourite–longshot bias: an analysis of decision making by supply‐ and demand‐side agents in parallel betting markets

This paper offers new insights into the behavioural origins of the ‘favourite–longshot’ bias — an established feature of betting markets, whereby longshots win less often than the subjective probabilities imply and favourites more often. A number of alternative explanations has been offered for this phenomenon but the main debate focuses on whether it is caused by the behaviour of those supplying betting markets (bookmakers) or of the demand‐side agents in these markets (bettors) . This study analyses a new data source which offers detailed information for a large sample of recent UK horseraces on decision‐making behaviour within the parimutuel and the parallel bookmaker‐based betting markets. The results offer strong evidence for the existence of the ‘favourite–longshot’ bias in bookmaker‐based markets, with a corresponding absence of such an effect in the parimutuel case. These results offer support for the view that the origins of the ‘favourite–longshot’ bias lie principally in the decisions of bookmakers rather than in the decisions of bettors. Copyright © 2000 John Wiley & Sons, Ltd.     

Cognitive adaptation and its consequences: a test of cognitive continuum theory

Cognitive Continuum Theory (CCT) is an adaptive theory of human judgement and posits a continuum of cognitive modes anchored by intuition and analysis. The theory specifies surface and depth task characteristics that are likely to induce cognitive modes at different points along the cognitive continuum. The current study manipulated both the surface (information representation) and depth (task structure) characteristics of a multiple‐cue integration threat assessment task. The surface manipulation influenced cognitive mode in the predicted direction with an iconic information display inducing a more intuitive mode than a numeric information display. The depth manipulation influenced cognitive mode in a pattern not predicted by CCT. Results indicate this difference was due to a combination of task complexity and participant satisfacing. As predicted, analysis produced a more leptokurtic error distribution than intuition. Task achievement was a function of the extent to which participants demonstrated an analytic cognitive mode index, and not a function of correspondence, as predicted. This difference was likely due to the quantitative nature of the task manipulations. Copyright © 2000 John Wiley & Sons, Ltd.     

Choices and opportunities: another effect of framing on decisions

Many decisions can be framed either as ‘choices’ between alternative courses of action (e.g. Should I move to New York or stay in Chicago?) or as ‘opportunities’ to pursue a particular course of action (i.e. Should I move to New York?). Although there is no logical difference between these two different decision frames, there may be important psychological differences between them. In four studies, we explore the differences between ‘choices’ and ‘opportunities’. The results of Studies 1 and 2 show that college students view many of the decisions they typically face as opportunities, rather than choices. Further, the results of Study 2 suggest that the frame students adopt is systematically related to the preferences they express. The latter finding led to Studies 3 and 4, where we show that preferences can be influenced by encouraging people to adopt one decision frame rather than another. © 1998 John Wiley & Sons, Ltd.     

The modified star graph and the petal diagram: two new visual aids for discrete alternative multicriteria decision making

Many studies have looked into the provisions of visual aids to multicriteria decision making. However, most of them have separated the display of alternative profiles and criteria weight information into two displays. This makes the analysis of the relationship between the criteria and alternatives and the effect of changing the criteria weights on the decision difficult. In this study, displays that can incorporate the display of both alternative profiles and criteria weight information for discrete alternative multicriteria decision-making problems are examined. The simple additive model is the multicriteria analysis method used. The result is two new visual aids for representing data of multicriteria decision-making problems, the modified star graph and the petal diagram. This paper discusses the two displays and compares their strengths and weaknesses. The results of a preliminary test conducted to evaluate the effectiveness of the displays are also included. © 1998 John Wiley & Sons, Ltd.     

Determining the implementation order of a general plan by using a multicriteria method

We describe a real-life application of a new multicriteria method in the context of assisting the decision-making for a general plan in the municipality of Kirkkonummi in Uusimaa, Finland. At the time our group started working on the problem, a proposal for an overall plan had already been completed, but the order in which different regional parts of the plan should be implemented needed to be considered based on the environmental impact assessment (EIA) procedure. The EIA procedure generated a large amount of data about the different impacts of the alternatives. For this group decision making problem we developed the SMAA-3 decision support method which does not require any explicit preference information from the decision makers during the procedure. The uncertainty of the basic data is modelled using ELECTRE III-type pseudo-criteria with preference and indifference thresholds. © 1998 John Wiley & Sons, Ltd.     

Time complexity and consistency issues in using the AHP for making group decisions

Two different ways of using the AHP in making group decisions are compared and evaluated. The first method combines different experts’ opinions before applying an eigenvalue method to obtain final weights for decision alternatives. The second, in contrast, derives each expert's rating for the decision alternatives before combining them. Both methods take into account the relative importance of different experts in making decisions. Comparison and evaluation of these two methods are made by using two criteria: time complexity and consistency indices. A numerical example is provided to illustrate the use of these two methods, and results of a mathematical simulation are presented for comparing the time complexity in different-sized problems. © 1998 John Wiley & Sons, Ltd.     

Euclid: Strategic alternative assessment matrix

The vast amount of information that must be considered to solve inherently ill‐structured and complex strategic problems creates a need for tools to help decision makers (DMs) recognize the complexity of this process and develop a rational model for strategy evaluation. Over the last several decades, a philosophy and a body of intuitive and analytical methods have been developed to assist DMs in the evaluation of strategic alternatives. However, the intuitive methods lack a structured framework for the systematic evaluation of strategic alternatives while the analytical methods are not intended to capture intuitive preferences. Euclid is a simple and yet sophisticated multiobjective value analysis model that attempts to uncover some of the complexities inherent in the evaluation of strategic alternatives. The proposed model uses a series of intuitive and analytical methods including environmental scanning, the analytic hierarchy process (AHP), subjective probabilities, and the theory of displaced ideal, to plot strategic alternatives on a matrix based on their Euclidean distance from the ideal alternative. Euclid is further compared to the quantitative strategic planning matrix (QSPM) in a real world application. The information provided by the users shows that Euclid can significantly enhance decision quality and the DM's confidence. Euclid is not intended to replace the DMs, rather, it provides a systematic approach to support, supplement, and ensure the internal consistency of their judgments through a series of logically sound techniques. Copyright © 2003 John Wiley & Sons, Ltd.     

Application of GIS and multicriteria evaluation in locating sustainable boundary between the tunari National Park and Cochabamba City (Bolivia)

Increased population growth and urbanization, has caused increase in demand for land around the city of Cochabamba, which has led to encroachment into the National Park and the construction of illegal settlements. This has created a number of problems, some of which are the direct consequences of the new settlements in the ‘Tunari’ foothills. These settlements constitute a threat to the environment and people because of their location in flood risk and aquifer recharge areas. In response to this problem the city authorities are considering relocating the boundary between the National Park and the city. This study has focused on the design and evaluation of alternative locations for a sustainable boundary between the north of ‘Cochabamba City’ and the southern boundary of the ‘Tunari National Park’. In this process, a rational and systematic approach of collaborative‐decision‐making, supported by geographical information systems (GIS) and multicriteria evaluation (MCE) has been employed and evaluated. Copyright © 2003 John Wiley & Sons, Ltd.     

Attribute‐based differentiation of alternatives

An intermediate step is introduced to the dialogue decision process for decision analysis. Alternatives are refined after they have been generated within a strategy table but before they are subject to more detailed evaluation. Two or more judges create a subjective mapping from alternatives to attributes that will later be mapped to criteria. In strategy tables, each of the alternative strategies consists of a coherent set of choices made across several decisions that are to be coordinated. These strategic alternatives are modified so as to increase their differentiation in the attribute space, rather than in the decision space alone. When criteria weights are unknown, the best alternative from the modified set may be superior to the best alternative from the original set. Furthermore, analysis of the resulting alternatives may yield a better mapping of the value response surface for the action space, in the sense that this mapping leads to eventual construction of a higher value alternative. Results are reported for a consulting engagement incorporating the proposed step. Copyright © 2003 John Wiley & Sons, Ltd.