Stochastic Programming and Value Based Decisions

Background

The description of the value based decision requires basic analytical representation of the DM’s preferences. The mathematical description on such a fundamental level requires basic mathematical terms like sets, relations and operations over them, and their gradual elaboration to more complex and specific terms like functions, operators on mathematically structured sets as well, and equivalency of these descriptions with respect to a given real object. In the last aspect of equivalency of the mathematical descriptions we enter the theory of measurements and scaling (Luce, Krantz, Suppes, & Tversky, 1990; Pfanzagl, 1971).