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Stochastic interval-grey number VIKOR method based on prospect theory

Qingsheng LI (School of Business, Linyi University, Linyi, China)
Ni Zhao (University of Suwon, Hwaseong-si, Korea)

Grey Systems: Theory and Application

ISSN: 2043-9377

Article publication date: 2 February 2015

Abstract

Purpose

The purpose of this paper is to deal with interval grey-stochastic multi-attribute decision-making problems. It proposes a VIKOR method based on prospect theory in which probabilities and the attribute value are both grey numbers.

Design/methodology/approach

In the prospect theory the results values and probability weight are used while the utility and probability values in the expected utility theory, which the more realistically reflect and describe the decision makers on the optimal process. VIKOR method makes the decision acceptable superiority and decision process stability. At the same time, a new interval grey number entropy is put forward, which is used to calculate the index weight of unknown.

Findings

The paper provides a VIKOR method based on prospect theory in which probabilities and the attribute value are both grey numbers. And the validity and feasibility of the method are illustrated by an example.

Research limitations/implications

Although VIKOR is much closer to PIS than TOPSIS, at the same time VIKOR method can get the compromise solution with priority, researchers are encouraged to carry on comparative study further.

Practical implications

The paper includes interval grey-stochastic multi-attribute decision-making method and implications. The validity and feasibility of the method are illustrated by a case.

Originality/value

This paper proposes a VIKOR method based on prospect theory in which probabilities and the attribute value are both interval grey numbers. At the same time, a new interval grey number entropy is put forward, which is used to calculate the index weight of unknown.

Keywords

Acknowledgements

Project supported by the National Natural Science Foundation of China (Grant No. 71111130211, 70901041).

Citation

LI, Q. and Zhao, N. (2015), "Stochastic interval-grey number VIKOR method based on prospect theory", Grey Systems: Theory and Application, Vol. 5 No. 1, pp. 105-116. https://doi.org/10.1108/GS-12-2014-0055

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited