MULTICRITERIA APPROACH TO PROSPECT THEORY: FUNDAMENTALS AND APPLICATION ADERSON

Authors

  • Aderson Campos Passos Instituto Brasileiro de Mercado de Capitais
  • Luiz Flávio Autran Monteiro Gomes Instituto Brasileiro de Mercado de Capitais

Abstract

This paper compares the use of two multicriteria decision analytical methods used for military material selection. In the decision analysis the Analytic Hierarchy Process – AHP was initially used first in order to rank the alternatives in the presence of multiple criteria. This study was conducted in the Army Evaluation Center, a unit of the Brazilian Army. The other decision analysis method employed was TODIM, which is based on Prospect Theory, thus allowing to take risks into account in the modeling stage. Although the two multi-criteria methods rely on different decision paradigms, this application study showed that results were quite similar to justify the use of either method in the practice of similar military decisionmaking processes.

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Author Biographies

Aderson Campos Passos, Instituto Brasileiro de Mercado de Capitais

Mestre em Administração. 1° Ten. Engenheiro de Manutenção, Seção de Engenharia, Hospital Central do Exército.

Luiz Flávio Autran Monteiro Gomes, Instituto Brasileiro de Mercado de Capitais

Doctor of Philosophy. Professor Titular. Faculdades Ibmec/RJ.

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Published

2008-07-23

Issue

Vol. 6 No. 1 (2005)

Section

Presentation

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