Decision-Making for New Technology – A Multi-Actor, Multi-Objective Method (Cunningham & Lei, 2007)


Cunningham, Scott W.; van der Lei, Telli E.: Decision-Making for New Technology: A Multi-Actor, Multi-Objective Method; in: Management of Engineering and Technology, 2007, No. 5-9, pp. 1176-1185.

Cunningham & Lei present a method that does not aggregate the individuals‘ preferences but instead considers strategic and economic factors in the assessment of multi-criteria decision making (MCDA).

They explicitly model exogenous and intrinsic values into their criteria. The exogenous values are based on MCDA (value at risk & trade-offs), and game theory (strategies & values).  The intrinsic values are based on cooperative game theory (negotiations), and preferences (revealed preferences from historic choices & value elicitation).

Using weighted linear value functions they model the system of a decision-maker on new technology.  Then the authors expand their system model to include alliances and outside options.  Their results show are somehow unexpected, the system does not agree on an equilibrium price (aka exchange rate), because individual companies in the alliance profit from raising prices locally within the network.  Thus they ask: "Given scarce resources, where must alliances trades be made to maximally enhance profitability?"

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