Multiple Criteria Decision Making and its Applications to Economic Problems
Multiple Criteria Decision Making and its Applications to Economic Problems ties Multiple Criteria Decision Making (MCDM)/Multiple Objective Optimization (MO) and economics together. It describes how MCDM methods (goal programming) can be used in economic
- PDF / 14,587,299 Bytes
- 164 Pages / 481.89 x 691.65 pts Page_size
- 43 Downloads / 235 Views
MUL TIPLE CRITERIA DECISION MAKING AND ITS APPLICATIONS
TO ECONOMIC PROBLEMS
by
ENRIQUE BALLESTERO and
CARLOS ROMERO Technical University of Madrid
Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data
ISBN 978-1-4419-5053-6 DOI 10.1007/978-1-4757-2827-9
ISBN 978-1-4757-2827-9 (eBook)
Printed on acid-free paper
All Rights Reserved
© 1998 Springer Science+Business Media New York Origina11y published by Kluwer Academic Publishers in 1998 Softcover reprint of the hardcover 1st edition 1998 No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, e1ectronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the copyright owner.
PREFACE The importance of connecting Operational ResearchIManagement Sciences (ORIMS) methods to economic analysis has been upheld for many years. A pioneer work in this direction is Dorfinan, Samuelson & Solows' book Linear Programming & Economic Analysis which connects linear programming models to economic analysis in general and to Leontiefs input-output model, in particular. Another remarkable foregoing is the introduction of multi-objective optimisation into portfolio selection theory and capital asset pricing models through Markowitz's mean-variance frontier. Prior to these mathematical operational efforts, fmancial analysis could hardly be considered a quantitative science. Despite this endeavour most recent and powerful ORIMS approaches, such as Multiple Criteria Decision Making (MCDM), are seldom present in today's economic literature. Nevertheless, it is a common fact that any real world decision in economics has to take into account multiple and eonflieting eriteria, as has been extensively demonstrated in fields such as investment analysis, produetion planning, finanee, manpower planning, natural resourees management, and so on.
In short, we fail to understand why the searce presenee of MCDM in economics. Standard approaches in eeonomics· are based on the optimisation of a decisionmakers' objeetives as a one-criterion function. At times, it is argued that eeonomie methodology stays away from the multi-criteria teehniques in order to measure preferences and optimise objeetives. However, one eould conclude that the standard paradigm in economics should remain impervious to new multi-criteria approaches. Such an attitude runs completely counter to all scientifie advances and praetieal economic applieations that the analysis intends to foster. Indeed, our intention is not aimed at ehanging the sound traditional paradigm in economies but seeks to demonstrate that MCDM ean reinforce it. If MCDM methodology is worthy for economists, we also think that the traditional economic thought is fruitful for the MCDM analysts themselves. Part One of the book introduces the MCDM approaches, which are most interesting to economists. This first part, comprising Chapters 1-5, is basically an overview ofMCDM method
Data Loading...
