Structuring and Weighting Criteria in Multi Criteria Decision Making (MCDM)

Abstract

The implications of qualitative distinctions between multiple criteria are considered. Some contributions to theory about the Analytical Hierarchy Process (AHP) are challenged. Experiments on alternative criteria structures are reported. These suggest that confusing structures are bad, but good structures are better than none. Guidelines on how to develop a structure are given for a well known case of the purchase of a house. It is suggested that differences between decision alternatives should provide a first phase basis for discovering criteria. A criteria tree should be structured ‘top down’ as a second phase by clustering criteria on the basis of qualitative difference. On any level the differences between criteria should follow relatively simple patterns. The rules used suggest the relevance of work on the structure of qualitative decision-making which is determined by Nomology, the science of the laws of the mind. Implications are considered for weighting trade-offs between homogeneous clusters of criteria. This should be done as a later ‘bottom up’ phase. The AHP scoring system is challenged. Some tests of alternative scoring methods are reported.