Fuzzy Behavioural Decision Model with Imperfect Information

Fuzzy Behavioural Decision Model with Imperfect Information Behavioral decision making is of growing interest of scientists and practitioners, economists and business people. A wide spectrum of successful behavioral theories is presented now, including Prospect theory (PT), multiple priors models, studies on altruism, trust and fairness. However, these theories are developed for perfect information, whereas real information on a decision maker’s (DM) behavior and environment is imperfect and is described in natural language (NL). In this paper we suggest a fuzzy behavioral decision model with imperfect information in which a DM’s behavior is described by a set of states with each state representing one principal behavior. In this model, states of nature and DM’s states constitute a space of combined states and NL-described imperfect relevant information is formalized by the use of the fuzzy sets theory. The utility function in the suggested model is represented as a fuzzy Choquet-like integral. The suggested investigations show that Expected Utility, Choquet Expected Utility and PT are special cases of the suggested model. We apply the model to solve a benchmark and a real-life decision problem. The obtained results show validity of the suggested model. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Economics and Management Engineering World Academic Publishing Co.

Fuzzy Behavioural Decision Model with Imperfect Information

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Publisher
THE WORLD ACADEMIC PUBLISHING CO. LIMITED
Copyright
Copyright © 2014, THE WORLD ACADEMIC PUBLISHING CO. LIMITED
ISSN
2225-742X
eISSN
2226-7344

Abstract

Behavioral decision making is of growing interest of scientists and practitioners, economists and business people. A wide spectrum of successful behavioral theories is presented now, including Prospect theory (PT), multiple priors models, studies on altruism, trust and fairness. However, these theories are developed for perfect information, whereas real information on a decision maker’s (DM) behavior and environment is imperfect and is described in natural language (NL). In this paper we suggest a fuzzy behavioral decision model with imperfect information in which a DM’s behavior is described by a set of states with each state representing one principal behavior. In this model, states of nature and DM’s states constitute a space of combined states and NL-described imperfect relevant information is formalized by the use of the fuzzy sets theory. The utility function in the suggested model is represented as a fuzzy Choquet-like integral. The suggested investigations show that Expected Utility, Choquet Expected Utility and PT are special cases of the suggested model. We apply the model to solve a benchmark and a real-life decision problem. The obtained results show validity of the suggested model.

Journal

International Journal of Economics and Management EngineeringWorld Academic Publishing Co.

Published: Dec 23, 2013

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