An Emergency Decision Making Method Based on Prospect Theory for Different Emergency Situations

Zi-Xin Zhang; Liang Wang; Ying-Ming Wang

doi:10.1007/s13753-018-0173-x

Article Contents

Article Navigation > International Journal of Disaster Risk Science > 2018 > 9(3): 407-420

Zi-Xin Zhang, Liang Wang, Ying-Ming Wang. An Emergency Decision Making Method Based on Prospect Theory for Different Emergency Situations[J]. International Journal of Disaster Risk Science, 2018, 9(3): 407-420. doi: 10.1007/s13753-018-0173-x

Citation:

Zi-Xin Zhang, Liang Wang, Ying-Ming Wang. An Emergency Decision Making Method Based on Prospect Theory for Different Emergency Situations[J]. International Journal of Disaster Risk Science, 2018, 9(3): 407-420. doi: 10.1007/s13753-018-0173-x

Citation:

PDF

An Emergency Decision Making Method Based on Prospect Theory for Different Emergency Situations

doi: 10.1007/s13753-018-0173-x

1 Decision Sciences Institute, Fuzhou University, Fuzhou 350116, China;
2 Department of Computer Sciences, University of Jaén, Jaén, 23071, Spain

Funds:

This work was partly supported by the Young Doctoral Dissertation Project of the Social Science Planning Project of Fujian Province (Project No. FJ2016C202), and the National Natural Science Foundation of China (Project No. 71371053, 61773123).

Available Online: 2021-04-26

Abstract

Abstract

Emergency decision making (EDM) is an effective way to deal with emergency situations because of its prominent role in alleviating the losses of properties and lives caused by emergency events. It has drawn increasing attention from both governments and academia, and become an important research topic in recent years. Studies show that decision makers are usually guided by bounded rationality under risk and uncertainty conditions. Their psychological behavior plays an important role in the decision making process, and EDM problems are usually characterized by high risk and uncertainty. Thus, decision makers’ psychological behavior has been considered in existing EDM approaches based on prospect theory. An emergency event might evolve into different situations due to its dynamic evolution, which is one of the distinctive features of emergency events. This important issue has been discussed in existing EDM approaches, in which different emergency situations are dealt with by devising different solutions. However, existing EDM approaches do not consider decision makers’ psychological behavior together with the different emergency situations and the different solutions. Motivated by such limitation, this study proposed a novel approach based on prospect theory considering emergency situations, which considers not only decision makers’ psychological behavior, but also different emergency situations in the EDM process. Two examples and related comparison are provided to illustrate the feasibility and validity of this approach.
- Emergency situations,
- Emergency decision making,
- Prospect theory,
- Psychological behavior

FullText(HTML)

References(35)

References

Abdellaoui, M., H. Bleichrodt, and C. Paraschiv. 2007. Loss aversion under prospect theory: A parameter-free measurement. Management Science 53(10): 1659–1674.

Bell, D.E. 1982. Regret in decision making under uncertainty. Operations Research 30(5): 961–981.

Bell, D.E. 1985. Disappointment in decision making under uncertainty. Operations Research 33(1): 1–27.

Bleichrodt, H., U. Schmidt, and H. Zank. 2009. Additive utility in prospect theory. Management Science 55(5): 863–873.

Camerer, C. 1998. Bounded rationality in individual decision making. Experimental Economics 1(2): 163–183.

Cosgrave, J. 1996. Decision making in emergencies. Disaster Prevention and Management: An International Journal 5(4): 28–35.

Dichtl, H., and W. Drobetz. 2011. Portfolio insurance and prospect theory investors: Popularity and optimal design of capital protected financial products. Journal of Banking & Finance 35(7): 1683–1697.

Dong, Y., Y. Liu, H. Liang, F. Chiclana, and E. Herrera-Viedma. 2018. Strategic weight manipulation in multiple attribute decision making. Omega 75: 154–164.

Dong, Y., H. Zhang, and E. Herrera-Viedma. 2016. Integrating experts’ weights generated dynamically into the consensus reaching process and its applications in managing non-cooperative behaviors. Decision Support Systems 84: 1–15.

Fan, Z.P., Y. Liu, and R.J. Shen. 2012. Risk decision analysis method for emergency response based on prospect theory. Systems Engineering-Theory & Practice 32(5): 977–984 (in Chinese).

Fan, Z.P., X. Zhang, F.D. Chen, and Y. Liu. 2013. Multiple attribute decision making considering aspiration-levels: A method based on prospect theory. Computers & Industrial Engineering 65(2): 341–350.

Kahneman, D., and A. Tversky. 1979. Prospect theory: An analysis of decision under risk. Econometrica: Journal of the Econometric Society 47(2): 263–291.

Levy, J.K., and K. Taji. 2007. Group decision support for hazards planning and emergency management: A Group Analytic Network Process (GANP) approach. Mathematical and Computer Modelling 46(7): 906–917.

Li, X.W. 2013. Decision-making method of highway network planning based on prospect theory. Procedia-Social and Behavioral Sciences 96(0): 2042–2050.

Liu, B., X. Zhao, and Y. Li. 2016. Review and prospect of studies on emergency management. Procedia Engineering 145: 1501–1508.

Liu, Y., Z.P. Fan, and Y. Zhang. 2014. Risk decision analysis in emergency response: A method based on cumulative prospect theory. Computers & Operations Research 42(2): 75–82.

Qian, J., Y. Liu, C. Liu, and Y.Y. Jiao. 2015. Study on case analysis and scenario deduction based on multi-dimensional scenario space method. Systems Engineering—Theory & Practice 35(10): 2588–2595 (in Chinese).

Schmidt, U., C. Starmer, and R. Sugden. 2008. Third-generation prospect theory. Journal of Risk and Uncertainty 36(3): 203–223.

Schmidt, U., and H. Zank. 2008. Risk aversion in cumulative prospect theory. Management Science 54(1): 208–216.

Schmidt, U., and H. Zank. 2012. A genuine foundation for prospect theory. Journal of Risk and Uncertainty 45(2): 97–113.

Shu, Q. 2012. Resource allocation and scheduling for unconventional emergency based on “scenario-response”. Ph.D. dissertation, University of Science and Technology of China, Hefei, China (in Chinese).

Sun, B., W. Ma, B. Li, and X. Li. 2018. Three-way decisions approach to multiple attribute group decision making with linguistic information-based decision-theoretic rough fuzzy set. International Journal of Approximate Reasoning 93: 424–442.

Tversky, A., and D. Kahneman. 1985. The framing of decisions and the psychology of choice. In Environmental impact assessment, technology assessment, and risk analysis, ed. V.T. Covello, J.L. Mumpower, P.J.M. Stallen, and V.R.R. Uppuluri, 107–129. Boston, MA: Springer.

Tversky, A., and D. Kahneman. 1991. Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics 106(4): 1039–1061.

Tversky, A., and D. Kahneman. 1992. Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty 5(4): 297–323.

Wakker, P.P. 2010. Prospect theory: For risk and ambiguity. Cambridge: Cambridge University Press.

Wang, L., Y.M. Wang, and B.X. Hu. 2016. Dynamic adjusting method of emergency alternatives based on prospect theory. Control and Decision 31(1): 99–104 (in Chinese).

Wang, L., Y.M. Wang, and L. Martínez. 2017. A group decision method based on prospect theory for emergency situations. Information Sciences 418: 119–135.

Wang, L., Z.X. Zhang, and Y.M. Wang. 2015. A prospect theory-based interval dynamic reference point method for emergency decision making. Expert Systems with Applications 42(23): 9379–9388.

Wang, Y.M., J.B. Yang, and D.L. Xu. 2005. A preference aggregation method through the estimation of utility intervals. Computers & Operations Research 32(8): 2027–2049.

Wu, G., and A.B. Markle. 2008. An empirical test of gain-loss separability in prospect theory. Management Science 54(7): 1322–1335.

Yu, F., X.Y. Li, and Q.Y. Sun. 2015. Design of the emergency case pedigree for scenario response. Systems Engineering – Theory & Practice 35(10): 2596–2605 (in Chinese).

Zhang, H., and Y. Liu. 2012. Key problems on fundamental science and technology integration in “scenario-response” based national emergency response platform system. Systems Engineering – Theory & Practice 32(5): 947–953 (in Chinese).

Zhou, L., X. Wu, Z. Xu, and H. Fujita. 2017. Emergency decision making for natural disasters: An overview. International Journal of Disaster Risk Reduction 27: 567–576.

Zhou, L., S. Zhong, S. Ma, and N. Jia. 2014. Prospect theory based estimation of drivers’ risk attitudes in route choice behaviors. Accident Analysis & Prevention 73: 1–11.

Relative Articles

Supplements(0)

Cited By

Proportional views