AHP in nonlinear scaling: from two-envelope problem to modeling by predictors

Stan Lipovetsky

doi:10.1590/0103-6513.20210007

Thematic Section - Advances in Analytic Hierarchy Process

AHP in nonlinear scaling: from two-envelope problem to modeling by predictors

Stan Lipovetsky

http://dx.doi.org/10.1590/0103-6513.20210007 Production, vol.31, e20210007, 2021

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Abstract

Paper aims: Extending the AHP abilities to new areas from explaining the famous Two-Envelope paradox to finding priorities as functions of auxiliary variables is suggested.

Originality: The proposed innovative and advantageous approach permits to find the non-constant priorities via regression modeling for the exponential or Cobb-Douglas production functions.

Research method: Transforming the ratio scale into the additive or logarithmic scales, which correspond to the multiplicative utility function, opens new possibilities in the multiple-criteria decision making.

Main findings: Two-Envelop problem is resolved, priority vectors are presented as functions by auxiliary variables, preferences are predicted and profiled by predictors.

Implications for theory and practice: The suggested techniques open novel possibilities of multiple-criteria decisions helping to researchers and managers to discover useful features of priority behavior due to the demographic, socio-economic, or technical properties of the compared alternatives, and to find optimal solutions for individual customers.

Keywords

AHP. Two-envelope paradox. Nonlinear scaling. Multiplicative utility. Priority as function. Exponential function. Cobb-Douglas production function.

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Submitted date:
02/09/2021

Accepted date:
03/31/2021

AHP in nonlinear scaling: from two-envelope problem to modeling by predictors

Stan Lipovetsky

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