Tuesday, February 17, 2015

Compensation and choice strategies for screening

In multicriteria decision situations, many choice strategies are used for selecting one alternative from the set of available alternatives, which is the essence of decision making.  In some cases, however, the decision-maker first wants to screen the available alternatives to find a subset to consider in more detail. Choice strategies can be used for screening as well as for selection.  In particular, the satisficing and disjunctive choice strategies are suited for screening.  The satisficing strategy sets a threshold or cutoff for each attribute and keeps only alternatives that satsify all of those thresholds.  The disjunctive strategy also sets a threshold for each attribute, but it  keeps any alternative that satisfies at least one of those thresholds.

These strategies correspond to preferences for non-compensating and compensating solutions.  A decision-maker who prefers non-compensating solutions will want solutions that are good in every way, which the satisficing strategy identifies.  A decision-maker who prefers compensating solutions may set higher thresholds and use a disjunctive strategy to screen the alternatives. Although no alternative can satisfy all of the thresholds, the decision-maker will be happy with those alternatives that can satisfy at least one of them because they are compensating solutions: each one performs well on at least one attribute, which compensates for poor performance on the other attributes. 


For example, suppose Joe and Rose are considering which college each one should attend.  Joe prefers non-compensating solutions and uses a satisficing strategy: he wants a college that has a reasonable tuition, that is at most 200 miles from home, AND has a top-40 engineering program.  He will narrow his search to colleges that meet all of those criteria.  Rose, however, prefers compensating solutions and uses a disjunctive strategy: she wants a college that is very inexpensive OR within 75 miles of home OR has a top-10 engineering program.  Her criteria are more difficult to meet, but she will narrow her search to those colleges that can meet any one of her criteria, which will be a very different set than those that Joe considers.  For instance, Joe would not consider a top-10 school that is far away and expensive, but Rose would. 

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