Encyclopedia of Operations Research and Management Science

2001 Edition
| Editors: Saul I. Gass, Carl M. Harris

Value function

  • Saul I. Gass
  • Carl M. Harris
Reference work entry
DOI: https://doi.org/10.1007/1-4020-0611-X_1100

In a decision problem, let a be a feasible alternative from the set of all feasible alternatives A. Each alternative is measured against n attributes (X1,..., Xn). The decision maker's (DM) problem is to choose an a in A that “maximizes” the payoff vector of scores [X1(a), ..., Xn (a)] = Xva. We define a real-valued, scalar function v(·), the value function, as follows. The function has the property that v(Xva) > vv(Xvb) if and only if the DM prefers alternative a to alternative b; and v(Xva) = vv(Xvb) if and only if the DM is indifferent between alternative a and alternative b. The DM's decision problem is now the selection of an alternative that maximizes v(Xv) over all alternatives.

Choice theory; Decision analysis; Multiple criteria decision making; Preference theory; Utility theory.

Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Saul I. Gass
    • 1
  • Carl M. Harris
    • 2
  1. 1.Robert H. Smith School of BusinessUniversity of MarylandCollege PartUSA
  2. 2.School of Information Technology & EngineeringGeorge Mason UniversityFairfaxUSA