Stochastic judgments in the AHP: the measurement of rank reversal probabilities

Stam, A. & Duarte Silva, A.P. (1997). Stochastic judgments in the AHP: the measurement of rank reversal probabilities. Decision Sciences 28 (3) 655-688. 10.1111/j.1540-5915.1997.tb01326.x.

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This paper presents a methodology for analyzing Analytic Hierarchy Process (AHP) rankings if the pairwise preference judgments are uncertain (stochastic). If the relative preference statements are represented by judgment intervals, rather than single values, then the rankings resulting from a traditional (deterministic) AHP analysis based on single judgment values may be reversed, and therefore incorrect. In the presence of stochastic judgments, the traditional AHP rankings may be stable or unstable, depending on the nature of the uncertainty.

We develop multivariate statistical techniques to obtain both point estimates and confidence intervals of the rank reversal probabilities, and show how simulation experiments can be used as an effective and accurate tool for analyzing the stability of the preference rankings under uncertainty. If the rank reversal probability is low, then the rankings are stable and the decision maker can be confident that the AHP ranking is correct. However, if the likelihood of rank reversal is high, then the decision maker should interpret the AHP rankings cautiously, as there is a subtantial probability that these rankings are incorrect. High rank reversal probabilities indicate a need for exploring alternative problem formulations and methods of analysis.

The information about the extent to which the ranking of the alternatives is sensitive to the stochastic nature of the pairwise judgments should be valuable information into the decision-making process, much like variability and confidence intervals are crucial tools for statistical inference. We provide simulation experiments and numerical examples to evaluate our method.

Our analysis of rank reversal due to stochastic judgments is not related to previous research on rank reversal that focuses on mathematical properties inherent to the AHP methodology, for instance, the occurrence of rank reversal if a new alternative is added or an existing one is deleted.

Item Type: Article
Research Programs: System and Decision Sciences - Core (SDS)
Depositing User: Romeo Molina
Date Deposited: 24 Aug 2016 14:07
Last Modified: 27 Aug 2021 17:27

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