MULTIDIMENSIONAL UTILITY FUNCTIONS: THEORY, ASSESSMENT AND APPLICATION.
Abstract
The report can be divided into three sections: The first develops theory concerning multidimensional utility functions. Certain behavioralistic assumptions are made about the decision maker's preferences, and the manner in which these assumptions restrict the functional form of the utility function is developed. The results are a number of representation theorems which simplify the assessment of the multidimensional utility function provided the requisite assumptions hold. In a separate development, three measures of the riskiness of multiattributed utility functions are defined and their usefulness indicated. The assessment procedure which has proven to be valuable in implementing the theory is presented in the second section. The third section discusses applications of the theory and procedure to assess decision makers' utility functions in three 'real world' situations. The first concerns preferences over service levels for two types of customers in a telephone system, the second is the preferences for shortage and outdating of blood in a hospital blood bank, and the third involves preferences over the cost and accuracy for different surveys of an inland waterway. An application of the theory by other authors to assess the safety of landing aircraft in different weather situations with three varying attributes is also discussed. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 01, 1969
- Accession Number
- AD0698796
Entities
People
- Ralph Lyons Keeney
Organizations
- Massachusetts Institute of Technology