Product Design Selection With Variability in Preferences for an Implicit Value Function

2004 ◽  
Author(s):  
K. Maddulapalli ◽  
S. Azarm
Keyword(s):  
Product Design ◽  
Decision Maker ◽  
Value Function ◽  
End Users ◽  
Optimal Designs ◽  
Selection Methods ◽  
Marginal Rate ◽  
Marginal Rate Of Substitution ◽  
Design Selection ◽  
Rate Of Substitution

Many existing selection methods require that the Decision Maker (DM) state his/her preferences precisely. However, the DM may not have enough information about the needs of end users thus causing variability in the preferences. To address this problem, we present a method for selection that accounts for variability in the DM’s preferences. Our method is interactive and iterative and assumes only that the preferences of the DM reflect an implicit value function that is quasi-concave and non-decreasing with respect to attributes. Due to the variability, the DM states his/her preferences with a range for Marginal Rate of Substitution (MRS) between attributes at a series of trial designs. The method uses the range of MRS preferences to eliminate “dominated designs” and find a set of “non-eliminated designs”. We present a heuristic to reduce the set of non-eliminated designs and obtain a set of “potentially optimal designs”. The significance of potentially optimal designs is that only one of these designs will be the most preferred for any subset of the range of MRS preferences. We present a payload design selection example to demonstrate and verify that our method indeed finds the set of potentially optimal designs.

Product Design Selection With Preference and Attribute Variability for an Implicit Value Function

2005 ◽  
Vol 128 (5) ◽  
pp. 1027-1037 ◽  
Author(s):  
A. K. Maddulapalli ◽  
S. Azarm
Keyword(s):  
Product Design ◽  
Value Function ◽  
Selection Process ◽  
Optimal Designs ◽  
Engineering Product ◽  
Marginal Rate ◽  
Marginal Rate Of Substitution ◽  
Design Alternatives ◽  
Attribute Levels ◽  
Design Selection

An important aspect of engineering product design selection is the inevitable presence of variability in the selection process. There are mainly two types of variability: variability in the preferences of the decision maker (DM) and variability in attribute levels of the design alternatives. We address both kinds of variability in this paper. We first present a method for selection with preference variability alone. Our method is interactive and iterative and assumes only that the preferences of the DM reflect an implicit value function that is differentiable, quasi-concave and non-decreasing with respect to attributes. The DM states his/her preferences with a range (due to the variability) for marginal rate of substitution (MRS) between attributes at a series of trial designs. The method uses the range of MRS preferences to eliminate “dominated designs” and then to find a set of “potentially optimal designs.” We present a payload design selection example to demonstrate and verify our method. Finally, we extend our method for selection with preference variability to the case where the attribute levels of design alternatives also have variability. We assume that the variability in attribute levels can be quantified with a range of attribute levels.

Interactive Product Design Selection With an Implicit Value Function

2002 ◽  
Author(s):  
K. Maddulapalli ◽  
S. Azarm ◽  
A. Boyars
Keyword(s):  
Product Design ◽  
Decision Maker ◽  
Trial Design ◽  
Value Function ◽  
Automated Method ◽  
Design Alternatives ◽  
Interactive Product ◽  
Electric Drill ◽  
Selection For ◽  
Design Selection

We present an automated method to aid a Decision Maker (DM) in selecting the ‘most preferred’ from a set of design alternatives. The method assumes that the DM’s preferences reflect an implicit value function that is quasi-concave. The method is iterative, using three approaches in sequence to eliminate lower-value alternatives at each trial design. The method is interactive, with the DM stating preferences in the form of attribute tradeoffs at each trial design. We present an approach for finding a new trial design at each iteration. We provide an example, the design selection for a cordless electric drill, to demonstrate the method.

scholarly journals Valuing the impact of Self-rated Health and Social Support on life satisfaction among Hong Kong Chinese population

2021 ◽  
Author(s):  
Chee Hon Chan
Keyword(s):  
Social Support ◽  
Life Satisfaction ◽  
Hong Kong ◽  
Chinese Population ◽  
Cost Benefit ◽  
Marginal Rate ◽  
Self Rated Health ◽  
Marginal Rate Of Substitution ◽  
Compensating Surplus ◽  
Rate Of Substitution

Abstract Background Research has highlighted that satisfaction in health and social support are key areas of life affecting individual’s wellbeing. Many social and public health initiatives use these two intervention mechanisms to improve individual’s wellbeing. For the purpose of cost-benefit assessment, there has been growing interest in expressing these intervention effects in economic terms. However, only a handful of studies have ever estimated these effects in economic terms, and none of which examined in a Chinese context. The aim of this study is to extend this line of valuation work to estimate the implicit willingness-to-pays on the effects of improving individuals’ self-rated health status (SRH) and social support (SS) on their life satisfaction in the Chinese population. Methods Using individual’s life satisfaction data from a two-wave representative panel survey in Hong Kong (n = 1,109), this study first conducted a cross-lagged analysis with structural equation modelling technique to examine the causal effects of SRH and SS on life satisfaction, while simultaneously adjusting their reverse causal influences. The use of this cross-lagged approach was the effort to minimising the endogeneity problem. Then, substituting the respective estimates to the formulae of compensating surplus, the marginal rate of substitution of SRH and SS with respect to individual’s equivalised monthly household were estimated and were then expressed as the willingness-to-pays on the effect of improving individuals’ SRH and SS on their life satisfaction. Results The cross-lagged analysis ascertained the casual effects of SRH (β = 0.078, 95%CI: 0.020, 0.151) and SS on individuals’ satisfaction with life. The sample’s marginal rate of substitution of SRH and SS were found to be 1.28 (95%CI: 0.43, 2.15) and 1.36 (95%CI: 0.23, 2.49) respectively. Translating into the concept of compensating surplus, the implicit monetary values of improving the sample’s SRH from “poor health” to “excellent health” and their SS from “little support” to “a lot of support” are equivalent to an increase in their equivalised monthly household income by HK$56,000 and HK$39,400 respectively. Conclusions This study has implications for the cost-benefit assessment in wellbeing initiatives for the Chinese population.

scholarly journals A guide to extending and implementing generalized risk-adjusted cost-effectiveness (GRACE)

2021 ◽  
Author(s):  
Darius N. Lakdawalla ◽  
Charles E. Phelps
Keyword(s):  
Cost Effectiveness ◽  
Life Expectancy ◽  
Risk Preferences ◽  
Illness Severity ◽  
Health State ◽  
Marginal Rate ◽  
Permanent Disability ◽  
Adjusted Cost ◽  
Marginal Rate Of Substitution ◽  
Rate Of Substitution

AbstractThe generalized risk-adjusted cost-effectiveness (GRACE) model generalizes conventional cost-effectiveness analysis (CEA) by introducing diminishing returns to Health-Related Quality of Life (QoL). This changes CEA practice in three ways: (1) Willingness to pay (WTP) increases exponentially with untreated illness severity or pre-existing permanent disability, and WTP ends up lower for mild diseases but higher for severe diseases compared with conventional CEA; (2) Average treatment effectiveness should be adjusted for uncertainty in outcomes; and (3) The marginal rate of substitution between life expectancy and QoL varies with health state. Implementing GRACE requires new parameters describing risk preferences over QoL, the marginal rate of substitution between life expectancy (LE) and QoL, and the variance and skewness of treatment outcomes distributions. In this paper, we provide: (1) a generalized WTP threshold incorporating the possibility of permanent disability; (2) a simpler method to estimate the tradeoff rate between QoL and LE, eliminating the need to carry out treatment-by-treatment estimates; (3) a more-general method to adjust WTP for illness severity that permits non-constant relative risk-aversion in QoL; (4) a new approach to estimating risk-preferences over QoL, leveraging established empirical methods from “happiness” economics; and (5) a step-by-step guide for practitioners wishing to implement multi-period GRACE analyses.

scholarly journals Generalized marginal rate of substitution in multiconstraint consumer’s problems and their reciprocal expenditure problems

SERIEs ◽  
2011 ◽  
Vol 2 (3) ◽  
pp. 401-421 ◽  
Author(s):  
Manuel Besada ◽  
Javier García ◽  
Miguel Mirás ◽  
Carmen Vázquez
Keyword(s):  
Marginal Rate ◽  
Marginal Rate Of Substitution ◽  
Rate Of Substitution

THE BECKER–COASE THEOREM RECONSIDERED

2015 ◽  
Vol 81 (2) ◽  
pp. 157-177 ◽  
Author(s):  
Pierre-Andre Chiappori ◽  
Murat Iyigun ◽  
Yoram Weiss
Keyword(s):  
Divorce Rate ◽  
Coase Theorem ◽  
Marginal Rate ◽  
Public And Private ◽  
Private Goods ◽  
Divorce Law ◽  
Marginal Rate Of Substitution ◽  
Divorce Laws ◽  
The Impact ◽  
Rate Of Substitution

Abstract:We reconsider the well-known Becker–Coase (BC) theorem according to which changes in divorce law should not affect divorce rates. We do that in a context of households that consume public goods in addition to private goods. For the Becker–Coase theorem to hold in this setting, utility must be transferable both within marriage and upon divorce, and the marginal rate of substitution between public and private consumption needs to be invariant in marital status. We show that if divorce alters the way some goods are consumed (either because some goods that are public in marriage become private in divorce or because divorce affects either the marginal rate of substitution between public and private goods or even the cardinalization of a spouse’s utility), then the Becker–Coase theorem holds only for very specific preferences. We conclude that, in general, divorce laws will influence the divorce rate, although the impact of a change in divorce laws can go in either direction.

Sign in / Sign up

Export Citation Format

Share Document