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Utility Functions: A Compromise Programming Approach to Specification and Optimization
Author(s) -
BALLESTERO ENRIQUE
Publication year - 1997
Publication title -
journal of multi‐criteria decision analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.462
H-Index - 47
eISSN - 1099-1360
pISSN - 1057-9214
DOI - 10.1002/(sici)1099-1360(199701)6:1<11::aid-mcda113>3.0.co;2-k
Subject(s) - compromise , linkage (software) , mathematical optimization , expected utility hypothesis , decision maker , measure (data warehouse) , computer science , function (biology) , mathematical economics , mathematics , operations research , social science , biochemistry , chemistry , database , evolutionary biology , sociology , biology , gene
Nowadays, utility theory and compromise programming (CP) are considered very different paradigms and methodologies to measure preferences as well as to determine decision maker's optima on an efficient frontier. In this paper, however, we show that a utility function with separate variables (presented in the form of a Taylor series around the ideal point) is reducible to a weighted sum of CP distances. This linkage between utility and compromise (based on a main assumption in which the usual utility functions hold) leads to (i) a method for specification and optimization of usual utility functions by operational technique and (ii) a reformulation of standard CP with the advantage of determining the best CP solution from a utility perspective. © 1997 John Wiley & Sons, Ltd.