Abstract
A single reference point (SRP) is typically employed in traditional studies on the multi-attribute decision making (MADM) method. However, SRP lacks the advantage of the multiplicity of reference points and is thus unable to adequately describe loss aversion actions. With the goal of determining the loss aversion characteristics of decision makers, this work proposes an MADM method that is based on double reference points (DRPs) to solve the MADM problem using crisp and interval fuzzy numbers. First, this work describes the universality of decision-making problems with DRPs and then evaluates the characteristics of DRPs and their effects on decision making. Second, attitude and utility functions are established on the basis of the requirements of loss aversion. Third, considering the “one-vote veto”characteristic of a “dissatisfaction”attitude, a binary utility value is created by integrating the occurrence probability p, and the utility value u. The fourth, the main characteristics of and the aggregation method for the binary utility value are analyzed and established. Finally, a new decision-making method is applied to resolve the location decision of an agricultural product logistics center. Results indicate that the relationship between attribute and reference point significantly influences decision behavior. Compared with the traditional decision-making method, the proposed decision-making method can effectively identify the feasibility levels of alternatives. The ranking of the proposed decision-making method for feasible alternatives is basically the same as that of the traditional decision-making method. These results can effectively help solve agricultural engineering problems and broaden the coverage of and provide references for MADM research.
Highlights
Multi-attribute decision-making (MADM) problem refers to the ranking and selection of finite alternatives with multiple attributes [1], [2]
The universality of decision-making problems with Double reference points (DRPs) and loss aversion behavior generates a new requirement for the research of decision-making methods
From the viewpoint of loss aversion, this study proposes an MADM method that is based on DRPs
Summary
Multi-attribute decision-making (MADM) problem refers to the ranking and selection of finite alternatives with multiple attributes [1], [2]. The recent studies on the theory and method of MADM suggest that the research on MADM based on complete rationality has achieved substantial results [6], [7], [8] The latter type is based on loss aversion theory. The bounded rational decision-making method based on loss aversion has recently gained research attention, and it includes the common methods of prospect theory, cumulative prospect theory, regret theory, and so on. Prospect theory, cumulative prospect theory, and regret theory are all based on loss aversion thinking, and all of them calculate loss/gain values through a single reference point. The new decisionmaking method will effectively promote the resolution of other multiple reference point decision-making problems. Compared with the traditional decision-making method, the proposed decision-making method can effectively identify the feasibility levels of alternatives, and the ranking results for feasible alternatives is basically the same as that of the traditional decision-making method
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