Assessing risky public investments with MUSTARD

This paper presents a practical implementation of multicriteria methodologies based on the UTA model by Jacquet‐Lagrèze and Siskos and Quasi‐UTA model by Beuthe and Scannella, which are specified with a non‐linear, but piecewise linear, additive utility function. In contrast with the general UTA model, the Quasi‐UTA specification structures the partial utilities as recursive exponential functions of only one curvature parameter. This allows for a reduction of the quantity of information necessary to build the utility function. The software MUSTARD implements different variants of these models. Firstly, it offers the basic deterministic UTA model of disaggregation, but also its first programmed stochastic version. In both cases, the software proceeds stepwise and interactively helping the decision maker to formulate the problem and state preferences between projects; in the stochastic case, the decision maker is even helped to build the criteria distributions. The Quasi‐UTA specification can be introduced in this disaggregation model. Secondly, the software offers an aggregation model whereby the Quasi‐UTA partial utility functions are built separately through specific questioning processes. The questions relating to deterministic criteria are of the ‘direct rating type’, while those of the stochastic criteria are either of the ‘variable probability’ or the ‘variable outcome’ type. The criteria weights can be assessed by the ‘swing weight’ method or by a UTA‐II side‐program. As an example as well as a test of the Quasi‐UTA aggregation approach, the paper presents its application to a real problem of selecting road investment projects in Belgium. Several experts and civil servants were interviewed, and their individual utility functions derived. The projects are ranked according to their rate of return, which is computed on the basis of the projects certain equivalent money value. Copyright © 2002 John Wiley & Sons, Ltd.     

An evaluation of multi‐criteria methods in integrated assessment of climate policy

Those who conduct integrated assessments (IAs) are aware of the need to explicitly consider multiple criteria and uncertainties when evaluating policies for preventing global warming. MCDM methods are potentially useful for understanding tradeoffs and evaluating risks associated with climate policy alternatives. A difficulty facing potential MCDM users is the wide range of different techniques that have been proposed, each with distinct advantages. Methods differ in terms of validity, ease of use, and appropriateness to the problem. Alternative methods also can yield strikingly different rankings of alternatives. A workshop was held in which climate change experts and policy makers evaluated the usefulness of MCDM for IA. Participants applied several methods in the context of a hypothetical greenhouse gas policy decision. Methods compared include value and utility functions, goal programming, ELECTRE, fuzzy sets, stochastic dominance, min max regret, and several weight selection methods. Ranges, rather than point estimates, were provided for some questions to incorporate imprecision regarding weights. Additionally, several visualization methods for both deterministic and uncertain cases were used and evaluated. Analysis of method results and participant feedback through questionnaires and discussion provide the basis for conclusions regarding the use of MCDM methods for climate change policy and IA analyses. Hypotheses are examined concerning predictive and convergent validity of methods, existence of splitting bias among experts, perceived ability of methods to aid decision‐making, and whether expressing imprecision can change ranking results. Because participants gained from viewing a problem from several perspectives and results from different methods often significantly differed, it appears worthwhile to apply several MCDM methods to increase user confidence and insight. The participants themselves recommended such multimethod approaches for policymaking. Yet they preferred the freedom of unaided decision‐making most of all, challenging the MCDM community to create transparent methods that permit maximum user control. Copyright © 2002 John Wiley & Sons, Ltd.     

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.     

Are absolute frequencies,relative frequencies,or both effective in reducing cognitive biases?

Biases in probabilistic reasoning are affected by alterations in the presentation of judgment tasks. In our experiments, students made likelihood judgments that an event was produced by various causes. These judgments were made in terms of probability, relative frequency or absolute frequency on a full or a pruned list of causes. When they had little personal experience of the event (causes of death), the pruning bias was smaller with relative frequencies than with absolute frequencies or probabilities. When they had more personal experience of the event (missing a lecture), the bias was less with both types of frequency than with probability but still lowest with relative frequency. We suggest that likelihood information is usually stored as relative frequencies when it has been obtained from public sources but that it is based on event counts when it is derived from personal experience. Copyright © 2000 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.     

Fourier‐Motzkin elimination method in MOLP problems

This paper introduces a method for finding the non‐dominated set in criterion space of an MOLP problem based on Fourier–Motzkin Elimination. The method incorporates a procedure that eliminates decision variables from constraints and transforms a feasible region from decision space to criterion space. While avoiding characterization of the efficient set in decision space, it finds the non‐dominated set in criterion space. After the decision maker's most preferred criterion vector has been identified, the corresponding efficient solutions can be found by backward substitution. The method was implemented in MATLAB using a tabular form and computational experiments were conducted. The results indicate that although the method performs well for relatively small problems, it can be computationally intensive for larger problems. Nonetheless, the method is intuitively appealing and it provides useful insights into the geometry and theory of MOLP. As such it makes it a valuable educational tool for students of multi‐criteria decision analysis. 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.