Abstract

We consider a model for constructing separable objective functions in n target variables from a few indifference points in two-dimensional planes. It is shown that (a) the data required are ordinal, simplest, and minimal; (b) the resulting ordinal preference is independent of the cardinal utility scale used in intermediate computations. The method is illustrated with an example of constructing a separable objective function of German economic policy in four target variables: Inflation, Unemployment, GNP Growth, and Increase in Public Debt. We provide some modifications of the model aimed at user’s convenience.Key wordsEconometric decision modelindependent preferenceseparable objective function

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