Expected Utility Based Decision Making under Z-Information and Its Application.

Rashad R Aliev,Derar Atallah Talal Mraiziq,Oleg H Huseynov

doi:10.1155/2015/364512

Abstract

Real-world decision relevant information is often partially reliable. The reasons are partial reliability of the source of information, misperceptions, psychological biases, incompetence, and so forth. Z-numbers based formalization of information (Z-information) represents a natural language (NL) based value of a variable of interest in line with the related NL based reliability. What is important is that Z-information not only is the most general representation of real-world imperfect information but also has the highest descriptive power from human perception point of view as compared to fuzzy number. In this study, we present an approach to decision making under Z-information based on direct computation over Z-numbers. This approach utilizes expected utility paradigm and is applied to a benchmark decision problem in the field of economics.

Highlights

Decision making is one of the attractive research areas in the last decades
This paper focuses on investigating an approach for decision making which generalizes the expected utility approach of Z-information
The concept of Z-numbers opens a door for applications in many areas, especially in decision making theory

Summary

Introduction

The complexity and uncertainty are persistent phenomenon in the real world, and the fuzzy set [1,2,3] is widely used in decision making process [3, 4]. Much of decision based information is uncertain. Human has a high capability of making logical decisions based on uncertain, incomplete, and/or inaccurate information [5]. Z-number is a sufficient formalization of real-world information that should roughly be considered in light of its reliability. The critical issue is that the reliability of information is not considered properly. In comparison with the classical fuzzy number, Z-number has more ability to describe the real information of human [6]

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Methods

Conclusion