Decision-making of investment in navigation safety improving schemes with application of cumulative prospect theory

Abstract

Navigation safety improving investment aims at mitigating risk and improving safety of shipping system, while decisionmakers' attitudes toward the uncertainty of shipping safety possess a characteristic of ''bounded rationality.'' To study the tendency of shipping safety investment decision-making with different risk perception and appetite, a decision-making method based on cumulative prospect theory is proposed in this article. First, we extract the decision attributes through analyzing the factors affecting shipping safety investment. Then, according to cumulative prospect theory, the value function and the probability weighting function for calculating cumulative prospect values of shipping investment attributes are given. Under the risk-based multi-attribute group decision-making framework, linear programming model and projection method are introduced to aggregate the weights of attributes and decision-makers, respectively. Furthermore, through a case study, the proposed methodology is utilized in Three Gorges Dam area, and the desirable safety investment scheme is determined from a set of candidate alternatives. The case study shows not only validity and feasibility of the decision-making approach but also the mechanism of shipping safety investment decision-making with consideration of the behavior characteristics of decision-makers such as reference dependence, risk appetite distortion, and loss aversion.

An Extended FMEA Model Based on Cumulative Prospect Theory and Type-2 Intuitionistic Fuzzy VIKOR for the Railway Train Risk Prioritization

“…Consequently, cumulative prospect theory [ 36 ] has been proposed to handle this matter. In cumulative prospect theory, the probability weight is replaced by cumulative probability weight and makes it a clear logic as well as a relatively simple computation procedure, thus, cumulative prospect theory can be extensively applied in various MCDM problems [ 37 , 38 , 39 , 40 ].…”

Planning under non-rational perception of uncertain spatial costs

“…Unlike CPT suggests, these risk measures are built using certain axioms that assume rationality and linearity of the DM's risk perception [10]. CPT has been extensively used in numerous engineering applications like traffic routing [11], network protection [12], stochastic optimization [13], and safe shipping policies [14] to model non-rational decision making. However, these notions are yet to be applied in the context of robotic planning and control.…”