Skip to main content

A Deviation Index Proposal to Evaluate Group Decision Making Based on Equilibrium Solutions

  • Conference paper
  • First Online:

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 274))

Abstract

The equilibrium proposed by Nash provides a basis from which group decisions can be selected. This kind of choice establishes a situation in which none of the participants will have any incentive to change their strategy if they are acting rationally, which is the major assumption of game theory. Leoneti proposed a utility function that allows multi-criteria problems to be modeled as games in order to find alternatives that meet the Nash equilibrium conditions for solving conflicts in group decision-making process. The objective of this research was to propose a deviation index from the theoretical rational decision (the Nash equilibrium solution) and to discuss the use of this index as an indicator of the theoretical rationality deviation. In accordance with other results presented in the literature, it was found that the group might not always choose this alternative, deviating from the equilibrium solutions, measured here by a deviation index.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    It is important to stress that this index can be calculated using any equilibrium as reference, which may vary depending on the research purposes.

  2. 2.

    The term “performance matrix” was adopted over other possible classifications to the criteria versus alternative matrix, such as, i.e., “decision matrix”, “consequence matrix”, etc.

  3. 3.

    The game is considered a non-cooperative game since the participants cannot make binding agreements before choosing their alternatives.

  4. 4.

    This alternative is called “ideal” because it contains the maximum absolute value of all criteria considered in the alternative’s evaluation and, therefore, is used as an indicator of direction to the maximum value that each criteria can eventually reach.

References

  1. Osborne, M.J., Rubinstein, A.: A Course in Game Theory. The MIT Press, Cambridge (1994)

    Google Scholar 

  2. Myerson, R.B.: Game Theory Analysis of Conflict. First Harvard University Press paperback edition (1997)

    Google Scholar 

  3. Nash, J.: Non-cooperative games. Ann. Math. 54, 286–295 (1951)

    Article  Google Scholar 

  4. Aumann, R., Brandenburger, A.: Epistemic conditions for Nash equilibrium. Econom.: J. Econom. Soc. 63(5), 1161–1180 (1995)

    Article  Google Scholar 

  5. Lee, C.: Multi-objective game theory models for conflict analysis in reservoir watershed management. Chemosphere 87(6), 608–613 (2012)

    Article  Google Scholar 

  6. Leoneti, A.B., Oliveira, S.V.W.B., Oliveira, M.M.B.: The Nash equilibrium as a solution to the conflict between efficiency and cost in the choice of systems for sanitary sewage treatment using a decision making model. Engenharia Sanitária e Ambiental 15, 53–64 (2010). (in Portuguese)

    Article  Google Scholar 

  7. Leoneti, A.B.: Utility function for modeling group multicriteria decision making problems as games. Oper. Res. Perspect. 3, 21–26 (2016)

    Article  Google Scholar 

  8. Myerson, R.B.: Nash equilibrium and the history of economic theory. J. Econ. Lit. 37(3), 1067–1082 (1999)

    Article  Google Scholar 

  9. Roth, A.E., Murnighan, J.K.: Equilibrium behavior and repeated play of the prisoner’s dilemma. J. Math. Psychol. 17(2), 189–198 (1978)

    Article  Google Scholar 

  10. Gilboa, I., Matsui, A.: Social stability and equilibrium. Econom.: J. Econom. Soc. 59(3), 859–867 (1991)

    Article  Google Scholar 

  11. Camerer, C.F., Fehr, E.: When does “economic man” dominate social behavior? Science 311(5757), 47–52 (2006)

    Article  Google Scholar 

  12. Bernheim, B.D.: Rationalizable strategic behavior. Econom.: J. Econom. Soc. 52(4), 1007–1028 (1984)

    Article  Google Scholar 

  13. Kahneman, D., Tversky, A.: Prospect theory: an analysis of decision under risk. Econometrica 47(2), 263–292 (1979)

    Article  Google Scholar 

  14. von Neumann, J., Morgenstern, O.: Theory of Games and Economic Behavior. Princeton University Press, Princeton (1944)

    Google Scholar 

  15. Camerer, C.F.: Behavioural studies of strategic thinking in games. Trends Cogn. Sci. 7, 225–231 (2003)

    Article  Google Scholar 

  16. Barron, F.H., Barrett, B.E.: Decision quality using ranked attribute weights. Manag. Sci. 42, 1515–1523 (1996)

    Article  Google Scholar 

  17. Jia, J., Fischer, G.W., Dyer, J.S.: Attribute weighting methods and decision quality in the presence of response error: a simulation study. J. Behav. Decis. Mak. 11, 85–105 (1998)

    Article  Google Scholar 

  18. Mckelvey, R.D., Mclennan, A.M., Turocy, T.L.: Gambit: Software Tools for Game Theory. Version 0.2007.01.30 (2007). http://www.gambit-project.org

  19. Jablonský, J.: MS Excel based system for multicriteria evaluation of alternatives. University of Economics Prague, Department of Econometrics (2009). http://nb.vse.cz/~jablon/

  20. Johnson-Laird, P.N., Shafir, E.: The interaction between reasoning and decision making: an introduction. Cognition 49(1–2), 1–9 (1993)

    Article  Google Scholar 

  21. Milikkovic, D.: Rational choice and irrational individuals or simply irrational theory: a critical review of the hypothesis of perfect rationality. J. Socio-Econ. 34(5), 621–634 (2005)

    Article  Google Scholar 

Download references

Acknowledgments

The authors thank the National Council of Technological and Scientific Development (CNPq) for Regular Research Grant (458511/2014-5), and the São Paulo Research Foundation (FAPESP) for the Scientific Initiation Scholarship (2014/09540-0) and for the grant for Paper Presentation (2016/03722-5). The authors also acknowledge the helpful comments of two anonymous referees.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Alexandre Bevilacqua Leoneti .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Springer International Publishing AG

About this paper

Cite this paper

Leoneti, A.B., de Sessa, F. (2017). A Deviation Index Proposal to Evaluate Group Decision Making Based on Equilibrium Solutions. In: Bajwa, D., Koeszegi, S., Vetschera, R. (eds) Group Decision and Negotiation. Theory, Empirical Evidence, and Application. GDN 2016. Lecture Notes in Business Information Processing, vol 274. Springer, Cham. https://doi.org/10.1007/978-3-319-52624-9_8

Download citation

Publish with us

Policies and ethics