The Application of Utility Theory in the Decision-Making Process for Investing in ADR Insurance

2010 ◽  
Author(s):  
Xinyi Song ◽  
Feniosky Peña-Mora ◽  
Carlos A. Arboleda
Keyword(s):  
Decision Making ◽  
Utility Theory ◽  
Decision Making Process

Is Additive Utility Function Always a Sufficient Method in the Project Prioritization Process? Bridge Management Perspective

2019 ◽  
Vol 2673 (10) ◽  
pp. 284-294 ◽  
Author(s):  
Onur Kalan ◽  
Abdullah Kurkcu ◽  
Kaan Ozbay
Keyword(s):  
Decision Making ◽  
Utility Theory ◽  
Functional Form ◽  
Utility Functions ◽  
Management Systems ◽  
Decision Making Process ◽  
Bridge Management ◽  
Policy Makers ◽  
Hypothetical Scenario ◽  
Multi Attribute Utility Theory

The prioritization of maintenance activities in bridges has great importance in bridge asset management systems as they are mentioned in MAP-21. One of the most commonly used prioritization methodologies in bridge management systems is multi-attribute utility theory process. In this study, the problem is defined as using the additive functional form in this process without testing additive independence (AI) assumption, which is one of the properties of multi-attribute utility theory. This study aims to emphasize the strength of the use of multiplicative functional forms when the multiplicative form is proven to be more appropriate by AI assumption test. To demonstrate this vital point, mathematical expressions are derived for the feasible regions of indifference curves. Then, the optimum region for both additive and multiplicative approaches are calculated using these analytical expressions to demonstrate the difference between the two relation to maximizing utility. This comparison is aimed at preventing suboptimal decisions because of the use of the additive approach when the multiplicative approach is more representative of the actual decision-making process. The relevance of this claim is also demonstrated using a simple hypothetical scenario. Findings of the paper provide valuable insights to decision makers and policy makers about the importance of choosing the most appropriate functional form for utility functions employed in a prioritization. We hope that policy makers at state departments of transportation will use the comparative analysis of the effect of utility functions on the final project selection process presented in this paper as part of their routine decision-making process.

An Application of Constructal Theory in the Multi-Objective Design of Product Platforms

2003 ◽  
Author(s):  
Michael J. Carone ◽  
Christopher B. Williams ◽  
Janet K. Allen ◽  
Farrokh Mistree
Keyword(s):  
Decision Making ◽  
Real World ◽  
Utility Theory ◽  
Pressure Vessels ◽  
Constructal Theory ◽  
Decision Making Process ◽  
Product Platform ◽  
Product Platforms ◽  
Multi Stage ◽  
Geometric Space

Designers develop product platforms when they wish to offer variety to the customer and simultaneously keep costs down to a reasonable level. It has been shown that it is feasible and useful to design hierarchic product platforms for customizable products as a problem of optimization of access in a geometric space, allowing the designer to thoroughly explore a product family’s market space. However, the presence of risk, uncertainty, and tradeoffs, which are inevitable aspects of a real-world design problem, are not considered in this method. We have addressed these limitations through the infusion of utility theory into the multi-stage decision-making process. The proposed approach is illustrated with an example: the design of a product platform for a line of customizable pressure vessels.

scholarly journals Towards a Better Understanding of Consumer Behavior: Marginal Utility as a Parameter in Neuromarketing Research

2018 ◽  
Vol 10 (1) ◽  
pp. 90 ◽  
Author(s):  
Letizia Alvino ◽  
Efthymios Constantinides ◽  
Massimo Franco
Keyword(s):  
Decision Making ◽  
Utility Theory ◽  
Consumer Behaviour ◽  
Marginal Utility ◽  
Marketing Research ◽  
Decision Making Process ◽  
Important Goal ◽  
Know How ◽  
Psychological Mechanisms ◽  
Research Gap

Understanding consumers’ decision-making process is one of the most important goal in Marketing. However, the traditional tools (e,g, surveys, personal interviews and observations) used in Marketing research are often inadequate to analyse and study consumer behaviour. Since people’s decisions are influenced by several unconscious mental processes, the consumers very often do not want to, or do not know how to, explain their choices. For this reason, Neuromarketing research has grown in popularity. Neuromarketing uses both psychological and Neuroscience techniques in order to analyse the neurological and psychological mechanisms that underlying human decisions and behaviours. Hence, studying these mechanisms is useful to explain consumers’ responses to marketing stimuli.This paper (1) provides an overview of the current and previous research in Neuromarketing; (2) analyzes the use of Marginal Utility theory in Neuromarketing. In fact, there is remarkably little direct empirical evidence of the use of Marginal Utility in Neuromarketing studies. Marginal Utility is an essential economic parameter affecting satisfaction and one of the most important elements of the consumers’ decision-making process. Through the use of Marginal Utility theory, economists can measure satisfaction, which affects largely the consumer’s decision-making process. The research gap between Neuromarketing and use of Marginal Utility theory is discussed in this paper. We describe why Neuromarketing studies should take into account this parameter. We conclude with our vision of the potential research at the interaction of Marginal Utility and Neuromarketing. 

scholarly journals Normative and descriptive theories of decision making under risk

2014 ◽  
Vol 57 (4) ◽  
pp. 25-50 ◽  
Author(s):  
Kaja Damnjanovic ◽  
Ivana Jankovic
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Theory ◽  
Developmental Stages ◽  
Expected Utility Theory ◽  
Decision Making Process ◽  
Decision Making Under Risk ◽  
Von Neumann ◽  
Basic Concepts ◽  
Descriptive Theories

The approaches to the decision making process are typically either normative or descriptive. We sketch a historical development of the decision theory, starting with concept of utility that was first introduced by Daniel Bernoulli and then explaining the basic concepts of von Neumann and Morgenstern?s normative expected utility theory (including the basic axioms of rationality). Then we present the descriptively oriented prospect theory of Kahneman and Tversky as a critique of the expected utility theory. We compare these theories and conclude that their historical sequence captures the sequence of the developmental stages of the decision-making process itself. However, normative and descriptive theories are not mutually exclusive.

Adopting Technological and Structural Changes to Horticultural Production in Spanish Mediterranean Regions

2005 ◽  
Vol 34 (4) ◽  
pp. 249-254
Author(s):  
Mª A. Fernández-Zamudio ◽  
Mª D. De Miguel ◽  
P. Caballero
Keyword(s):  
Decision Making ◽  
Irrigation Water ◽  
Utility Theory ◽  
Structural Changes ◽  
Decision Making Process ◽  
Multi Attribute Utility Theory ◽  
Mediterranean Regions ◽  
Vegetable Cultivation

The decision-making process of farmers in the Spanish Mediterranean regions was analysed using the function of Multi-Attribute Utility Theory (MAUT). The economic, agronomic and social repercussions resulting from adopting a series of technological and structural improvements were evaluated on farms with citricultural and outdoor horticultural production. The introduction of such measures is necessary to improve competitiveness and favour the sustainability of these farms. The outstanding consequences of these innovations were a more efficient use of irrigation water and an increase in the area of vegetable cultivation when mechanized, which counteracted the overwhelming trend in the area towards citriculture.

Using Value-Focused Thinking and Multicriteria Decision Making to Evaluate Energy Transition Alternatives

2020 ◽  
Vol 17 (4) ◽  
pp. 330-355 ◽  
Author(s):  
Tim H¨ofer ◽  
Rüdiger von Nitzsch ◽  
Reinhard Madlener
Keyword(s):  
Decision Making ◽  
Utility Theory ◽  
Multicriteria Decision Making ◽  
Energy Transition ◽  
Energy System ◽  
Decision Making Process ◽  
Multiattribute Utility ◽  
Multiattribute Utility Theory ◽  
Value Focused Thinking ◽  
Objective System

The future transformation of the energy system is a contentious topic, involving a variety of conflicting opinions and interests. In order to structure and evaluate these opinions, we develop a decision-making process with professional stakeholders and energy experts. The aim of this process is to develop a common objective system for the energy transition and to evaluate four possible energy transition alternatives for Germany until 2030. We apply value-focused thinking to define and structure the objectives of the stakeholders and use multiattribute utility theory to evaluate the preferences of the stakeholders toward these objectives. The results show that 8 out of 11 stakeholders prefer the energy transition alternative with the highest climate protection ambitions. Only 3 stakeholders favor the pan-European alternative, where Germany’s power system is further integrated into the European energy system.

AAC Decision-Making and Mobile Technology: Points to Ponder

2014 ◽  
Vol 23 (2) ◽  
pp. 104-111 ◽  
Author(s):  
Mary Ann Abbott ◽  
Debby McBride
Keyword(s):  
Decision Making ◽  
Mobile Technology ◽  
Communication System ◽  
Augmentative And Alternative Communication ◽  
Evaluation Process ◽  
Decision Making Process ◽  
Alternative Communication ◽  
Ipod Touch ◽  
Feature Match

The purpose of this article is to outline a decision-making process and highlight which portions of the augmentative and alternative communication (AAC) evaluation process deserve special attention when deciding which features are required for a communication system in order to provide optimal benefit for the user. The clinician then will be able to use a feature-match approach as part of the decision-making process to determine whether mobile technology or a dedicated device is the best choice for communication. The term mobile technology will be used to describe off-the-shelf, commercially available, tablet-style devices like an iPhone®, iPod Touch®, iPad®, and Android® or Windows® tablet.

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