Risk-Oriented Approach in Multi-Criteria Decision-Making

Abstract

Decision-making depends on the availability of information and the ability of decision-makers to manipulate this information. This paper proposes an approach that integrates the decision-relevant information, which is subject to uncertainty, to multi-criteria decision-making. An approach must enable decision-makers to explore the uncertainty and risk involved in their decisions. It arose from the theory of risk-based decision-making and the generalization of particular risk-based solutions in different domains. Multi-Attribute Utility Theory (MAUT) became the ground for the proposed approach. Utility functions appropriately account for the associated uncertainty and risk attitude of decision-makers. Three types of weighing policies reflected risk importance from the decision-makers' point of view were introduced. MAUT seeks to trade-off among criteria and assigns a ranking to the alternatives. We examined the property of the proposed approach through a quantitative study on the alternatives ranking for decision-making in the transfer from face-to-face to online learning. The results showed that the risk-oriented approach reflected the risk-averse property and consequently provided rankings similar to ones realized in the natural conditions.