Modifications of the Hurwicz’s decision rule

Helena Gaspars-Wieloch

Abstract

The Hurwicz’s criterion is one of the classical decision rules applied in decision making under uncertainty as a tool enabling to find an optimal pure strategy both for interval and scenarios uncertainty. The interval uncertainty occurs when the decision maker knows the range of payoffs for each alternative and all values belonging to this interval are theoretically probable (the distribution of payoffs is continuous). The scenarios uncertainty takes place when the result of a decision depends on the state of nature that will finally occur and the number of possible states of nature is known and limited (the distribution of payoffs is discrete). In some specific cases the use of the Hurwicz’s criterion in the scenarios uncertainty may lead to quite illogical and unexpected results. Therefore, the author presents two new procedures combining the Hurwicz’s pessimism-optimism index with the Laplace’s approach and using an additional parameter allowing to set an appropriate width for the ranges of relatively good and bad payoffs related to a given decision. The author demonstrates both methods on the basis of an example concerning the choice of an investment project. The methods described may be used in each decision making process within which each alternative (decision, strategy) is characterized by only one criterion (or one synthetic measure).
Author Helena Gaspars-Wieloch (WIiGE / KBO)
Helena Gaspars-Wieloch,,
- Department of Operations Research
Journal seriesCentral European Journal of Operations Research, ISSN 1435-246X, (A 20 pkt)
Issue year2014
Vol22
No4
Pages779-794
Publication size in sheets0.75
Keywords in Englishdecision making under uncertainty, states of nature, Hurwicz’s criterion, Laplace’s criterion, Optimal pure strategy
ASJC Classification1803 Management Science and Operations Research
DOIDOI:10.1007/s10100-013-0302-y
Languageen angielski
Score (nominal)20
Score sourcejournalList
ScoreMinisterial score = 20.0, 17-12-2019, ArticleFromJournal
Ministerial score (2013-2016) = 20.0, 17-12-2019, ArticleFromJournal
Publication indicators WoS Citations = 13; Scopus SNIP (Source Normalised Impact per Paper): 2014 = 1.217; WoS Impact Factor: 2014 = 0.832 (2) - 2014=0.933 (5)
Citation count*39 (2020-09-25)
Cite
Share Share

Get link to the record


* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
Back
Confirmation
Are you sure?