Link function selection in stochastic multicriteria decision making models

A stochastic formulation of the Analytic Hierarchy Process (AHP) using an approach based on Bayesian categorical data models has been developed. However, in categorical data models it is known that the selection of the link function may have an impact on the model estimates. In particular, the selection of the probit link implies an assumption that model error terms are normally distributed and this normality assumption is regularly utilized in other related methods such as the multiplicative AHP. We examine model performance with respect to the choice of two model link functions. With regard to point estimates, it is found that the logit formulation is better able to replicate the estimates obtained by the eigenvector decomposition associated with the original formulation of the AHP. By contrast, the probit link produces priorities which are consistently more moderate than those of the AHP. The results suggest that the logit formulation will be preferred by decision makers who wish t...

• Type: Journal
• Year: 2006
• Where: EOR
• Authors: Eugene D. Hahn
• Keywords: Analytic Hierarchy Process, Categorical Data Models, EOR 2006, Link Functions