L. Robin Keller

A Modeling Methodology for Multiobjective Multistakeholder Decisions Implications for Research

anagementsciencescurrentlydonotoffera systematic approach to model thedynamics and effects of multiple stake-holders’ objectives on corporate decisions. The pur-pose of this article is to introduce a structured qualita-tive methodology that provides researchers with ameans to systematically model, analyze, and comparecases of context-rich, idiosyncratic organizationaldecisions that involve multiple sets of objectives ofmultiple and divergent stakeholders.The multiobjective multistakeholder decisionmodeling methodology consists of a stepwiseapproach for inferring organizational priorities bymodeling organizational objectives hierarchies. Anobjectives hierarchy classifies related, more specificsubsets of objectives into higher level categories ofbroader, more general objectives in a hierarchical treestructure. In the modeling methodology, we combinequalitative and structured elements to achieve twotraditionally exclusive research goals: retain a highlevel of the decision’s complexity and simultaneouslyprovidemeansforsystematiccomparisonswithinoneor among several decision cases. With this methodol-ogy, we aim to broaden the empirical base of stake-holder theory by expanding its methodologicalarsenal.The modeling methodology is nontraditional inthat it links two formerly distinct streams of research:(a) multiattribute decision analysis and, specifically,the objectives hierarchies method from decision anal-ysis (Keeney, 1992; von Neumann & Morgenstern,1947;vonWinterfeldt,1987)and(b)recentdescriptivedevelopments in the stakeholder literature (Freeman,1984; Mitchell, Agle, & Wood, 1997). The objectiveshierarchies method creates tree structures that orga-nize the objectives of a decision maker into related

Examining Predictive Accuracy Among Discounting Models

Both descriptive and normative arguments claim that the discount rate to be applied to public projects should be elicited from individual intertemporal preferences. We present a methodology to analyze data from experimental surveys on intertemporal preferences. Focusing on the exponential and the hyperbolic discounting models, we model the experimental data published by Thaler (1981) by means of different specifications. Standard measures of goodness of prediction are then applied to fitted data to select among alternative specifications. We first present our approach by applying it to simulated data. We then present a procedure for statistical estimation of the sample discount rate, testing four specifications.

Empirical investigation of some properties of the perceived riskiness of gambles

Abstract Empirical tests of some properties of the perceived riskiness of gambles are reported. In experiments conducted with U.S. and German subjects, we observed a remarkable consistency in risk judgments. Four possible measures of risk, derived by R. Duncan Luce, were examined. We found that risk decreases as a constant amount is added to all outcomes of a gamble. Two of Luces measures require that risk not change with the addition of a constant, and thus these measures are not appropriate for describing perceived risk. We also found that Luces logarithmic measure is not empirically valid. Luces fourth measure (the expectation of the absolute value of the outcomes raised to a parameter θ) seems to have more promise than his other three measures. These results provide some necessary conditions that a new theory or extension of Luces measures must satisfy.

A Multiple-Objective Decision Analysis for Terrorism Protection: Potassium Iodide Distribution in Nuclear Incidents

This paper presents a multiple-objective decision analysis approach to qualitatively and quantitatively evaluate different potassium iodide (KI) distribution plans for a hypothetical local region. We developed this approach for a U.S. National Research Council committee that was charged with figuring out the best means for protecting people against potential thyroid cancer resulting from the release of radioactive iodine from nuclear incidents occurring due to terrorism or accidents. We first identify an objectives hierarchy and then develop the single-attribute value functions and the weights for the objectives using a swing weight method. The identification of the largest value gaps between the status quo and the ideal situation helps to develop potential KI distribution plans. We then use an additive value function to assess the performance of these new alternatives, with the status quo as a benchmark, by computing their overall values. Finally, sensitivity analysis for the KI problem shows how this approach can create more key insights for the improvement of health and safety decision-making processes.

A Multiattribute-utility-function Approach to Weighing the Risks and Benefits of Pharmaceutical Agents

Both the selection of doses of pharmaceutical agents and comparisons between pharma ceutical agents have long been based on the nonquantified concept of the risk-benefit ratio. Though useful, this concept implies a data comparison that is difficult to make: the toxicity versus the efficacy of a drug compound. This research demonstrates an approach for weigh ing risks and benefits by combining utility functions for human efficacy and toxicity with animal and laboratory toxicity information to develop an overall multiattribute utility function for an ophthalmic pharmaceutical agent, I-bunolol, intended for the treatment of glaucoma. With this multiattribute function and a small portion of the published data available for this drug, the expected utilities for six doses (including a control) could be compared and the value of this approach in drug-dosage selection demonstrated. Key words: decision analysis; expected utility; dosage selection; compound comparison; pharmaceutical decision; mul tiattribute utility; risk-benefit ratio. (Med Decis Making 1993;13:118-125)

Testing of the 'reduction of compound alternatives' principle

This paper reports an empirical investigation of the effects of three pictorial forms of problem representation on conformance with the Reduction of Compound Alternatives Principle of expected utility theory. The most common form of representation, written problem statements, was compared with three pictorial representations: tubes containing one hundred labeled balls, decision matrices with each column proportional in size to the probability of the corresponding event, and bar graphs. The tubes representation led to fewer violations of the Principle. In addition, when subjects were trained to construct proportional matrices from written problem statements, they exhibited fewer violations than those who received the same problems already formatted in proportional matrices. The results reported here should contribute to the development of a theory of the way people frame decision problems.

A Markov model to evaluate cost-effectiveness of antiangiogenesis therapy using bevacizumab in advanced cervical cancer

OBJECTIVE To evaluate the cost-effectiveness of bevacizumab in recurrent/persistent and metastatic cervical cancer using recently reported updated survival and toxicology data. METHODS A Markov decision tree based on the Gynecologic Oncology Group 240 randomized trial was created. The 2013 MediCare Services Drug Payment Table and Physician Fee Schedule provided costs. In the 5-year model subjects transitioned through the following states: response, progression, minor complications, severe complications, and death. Patients experiencing a health utility per month according to treatment effectiveness were calculated. Because cervical cancer survival is measured in months rather than years, results were reported in both quality adjusted cervical cancer life months and years (QALmonth, QALY), adjusted from a baseline of having advanced cervical cancer during a month. RESULTS The estimated total cost of therapy with bevacizumab is approximately 13.2 times that for chemotherapy alone, adding

Product quality risk perceptions and decisions: contaminated pet food and lead-painted toys.

73,791 per 3.5months (0.29year) of life gained, resulting in an incremental cost-effectiveness ratio (ICER) of

The Founding of Informs: a Decision Analysis Perspective

21.083 per month of added life. The ICER increased to

An Empirical Study of the Toxic Capsule Crisis in China: Risk Perceptions and Behavioral Responses

5775 per month of added life and