Public infrastructure decisions affect many stakeholders with various benefits and costs. For public decisions, it is crucial that decision-making processes and outcomes are fair. Fairness concepts ...have rarely been explored in public infrastructure planning. We close this gap for a global issue of growing importance: replacing sewer-based, centralized by decentralized wastewater systems. We empirically study fairness principles in this policy-relevant context, and identify possible influencing factors in a representative online survey of 472 Swiss German residents. In a transition phase, innovative, decentralized pilot wastewater systems are installed in households. We designed two vignettes for this context to test the adhesion to principles of distributive justice—equality, equity, and need—at individual and community levels. A third vignette tests procedural justice with increasing fulfilment of fair process criteria. The results confirm our hypotheses: equity is perceived as fairer than equality at individual and collective levels. Contrary to expectations and literature, need is perceived as even fairer than equity. Procedural justice results confirm literature, e.g., the majority (92%) of respondents deems a policy fair that includes them in decision-making. Only few demographic and explanatory factors are significantly correlated with respondents’ fairness perceptions. Although unexpected, this is positive, implying that introducing decentralized wastewater technology can be designed for the entire population independent of characteristics of individuals. Generally, our results confirm literature: fairness perceptions depend on the circumstances. Hence, they should be elicited in the exact application context to be able to enter negotiation processes and provide concrete advice to decision makers.
•We develop methods to derive complete rankings from stochastic indices.•These methods do not require estimation of specific parameters.•A computational analysis indicates significant differences ...between methods.•We analyze information anomalies (more information gives less accurate results).
Volume-based methods for decision making under incomplete information like the SMAA family of methods provide rich probabilistic information to support decision making. However, they usually do not directly generate a unique ranking of alternatives. Methods to create such a unique ranking from incomplete preference information typically select one parameter vector, either by mathematical programming approaches or by averaging, and then apply a preference model using this parameter vector. In the present paper, we develop several models to infer a complete ranking or a complete preorder of alternatives directly from the probabilistic information provided by volume-based methods without singling out a specific parameter vector. We compare the results obtained by these models to those obtained with a single parameter approach in a computational study. Results indicate small, but significant differences in the performance of methods, as well as in the probability that additional preference information might worsen, rather than improve, the results.
Zeuthen–Hicks bargaining provides a dynamic model that explains how two parties in a negotiation make concessions to reach the Nash bargaining solution. However, it is not clear whether this process ...will always reach the global optimum corresponding to the Nash bargaining solution, or could end at a local optimum, or even in disagreement. In this paper, we analyze different types of utility functions, both analytically and in a computational study, to determine under which circumstances convergence to the Nash bargaining solution will be achieved. We show that non-standard preferences, involving, e.g., reference point effects, might indeed lead to multiple local optima of the Nash bargaining objective function and thus failure of the bargaining process. This occurs more often if expectations of parties are mutually incompatible.
Simple heuristics can be efficient ways of decision making and literature has shown that they are widely used in actual decision situations. Although many types of heuristics have been found and ...analyzed, there is only scarce research on factors that lead to the use of a particular heuristic. In the present paper, we describe an experiment to analyze whether the usage of a particular heuristic like recognition or take-the-best depends on individual decision making styles as identified by Scott and Bruce (Educ Psychol Meas 55(5):818–831,
1995
). The experiment is based on a choice problem, in which different heuristics are likely to lead to different choices. Analyzing experimental data from two replications of the experiment in two different countries, we find some evidence that decision making styles influence the use of heuristics. However, considerable differences between the two experiments indicate that other, perhaps cultural, factors might also be important.
We apply the Zeuthen–Hicks bargaining model in an empirical study of electronic negotiations. Using a typology of bargaining steps based on that model, we study to what extent actual steps conform to ...the predictions of the model, and the effects of conformity with the model on bargaining outcomes. Results indicate that the model predicts bargaining steps only slightly better than chance, but that steps conforming to the model lead to outcomes that are closer to the efficient frontier, closer to the Nash bargaining solution, and provide higher utility to the party using such steps.
This research aims at preference reversals in dynamic adjusting decisions made by decision‐makers who have regretful emotions. Our model incorporates a utility function that includes the regretful ...feeling into outcomes under uncertainty. Then, by using the process of backward induction, it analyzes differences in the decisions of three types of decision‐makers with perfect rationality, partially anticipated regret, and fully anticipated regret. Finally, we apply this dynamic adjusting model to emergency plans in which decision‐makers need to choose the best action from multiple selections quickly to reduce the loss caused by disaster incidents and uncertainty. This model allows to compare decisions made by rational and irrational agents, which is a more realistic estimate and measure of several applications in the real life, such as medical services and emergency management.
Abstract This work proposes and studies a dynamic model of two bargaining parties exchanging offers over time, considering their confidence about the share of the “pie” they obtain, which translates ...into expectations regarding the outcome of the bargaining process. The model predicts the sequence of offers as well as the final agreement for given confidence parameters. A mathematical analysis of the model shows the outcome is an Asymmetric Nash Bargaining Solution with exponents determined by the bargainers’ confidence. Moreover, a compensation effect can be found between confidence and risk aversion. This work also considers that confidence levels of bargainers might change during the negotiation, and we conduct a comprehensive simulation study to analyze the effect of such changes. Through Monte-Carlo simulation, we show that a bargainer is better off if its confidence increases, but the advantage is lost if the other party’s confidence increases in a similar way. In that case, concessions are smaller and negotiations last longer. Changing confidence parameters make the outcome harder to predict, as it will depend more on the final confidence than the initial one. The simulations also show that the average size of concessions, and therefore the final agreement, depend not only on whether confidence increases or decreases, but also on the change rate, with stronger effects observed when change accelerates towards the end of the process.
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