ABSTRACT
This chapter attempts to show the central idea and results of decision analysis and related decision-making models without mathematical details. Utility theory and value theory are described for modeling value perceptions of a decision maker under various situations, risky or riskless situations, and situation of single or multiple attributes. Multiattribute utility theory is a powerful tool for multiobjective decision analysis, since it provides an efficient method of identifying von Neumann–Morgernstern utility functions of a decision maker. In many situations, it is practically impossible to assess directly a multiattribute utility function, so it is necessary to develop conditions that reduce the dimensionality of the functions that are required to be assessed. The chapter presents measurable value functions under certainty, under risk where the probability of each event occurring is known, and under uncertainty where the probability of each event occurring is unknown but the probability of a set of events occurring is known.
