chapter  4
16 Pages

ON MULTI-ATTRIBUTE RISK ANALYSIS

ByMARTIN PETERSON

The aim of this contribution is twofold. First, I wish to give a non-technical overview of multi-attribute risk analysis.1 This will, I hope, be helpful for readers not already familiar with this widely used methodology. The second aim is more challenging: I shall explore and defend an argument to the effect that multi-attribute risk analysis is unsuitable to decision-making involving sufficiently disparate values. The argument has two parts. The first part shows that on the multi-attribute approach, it is plausible to maintain that alternatives are sometimes incomparable, i.e. that the decision-maker’s ranking of alternatives is incomplete. In the second part I show that anyone who accepts the first part of the argument can be exploited, i.e. may make a sequence of choices leading to a certain loss. Exploitability is a familiar sign of irrationality, traditionally used for motivating transitivity and other structural constrains on rational choice behaviour. If correct, the present contribution shows that exploitability also poses problems for advocates of multi-attribute risk analysis.