Multiple Criteria Decision Making and its Applications to Economic Problems

This volume ties Multiple Criteria Decision Making (MCDM)/Multiple Objective Optimization (MO) and economics together. It describes how MCDM methods (goal programming) can be used in economics. The volume consists of two parts. The first part introduces the MCDM approaches, an overview of MCDM methods that can be used to address a wide range of economic problems. Readers looking for an in-depth discussion of multi-criteria analysis can grasp and become acquainted with the initial MCDM tools, language and definitions. The second part focuses on the theoretical core of the book. Thus an economic meaning is given to several key concepts on MCDM, such as ideal point, distance function, etc. It illustrates how Compromise Programming (CP) can support the standard premise of utility optimization in economics as well as how it is capable of approximating the standard utility optimum when the decision-makers' preferences are incompletely specified. The text also deals with production analysis, referring to a standard joint production scenario, analyzed from the point of view of MCDM schemes.Other issues dealt with include the utility specification problem in the n-arguments space within a risk aversion context.