In:
Decision Analysis, Institute for Operations Research and the Management Sciences (INFORMS), Vol. 3, No. 1 ( 2006-03), p. 3-15
Abstract:
We describe a search problem in which a decision maker (DM) must select among sequentially encountered options. Each option is described by multiple attributes, and the value of an option is given by a separable function of its attribute values. However, the attribute values are not known with certainty, and can only be ascertained in a predefined order, at some fixed cost. During the search the DM can choose to select an option, purchase information about an attribute value, reject (permanently) the current option and continue the search, or terminate the search and accept a status quo outcome. We introduce a threshold policy for this search process, and prove the optimality of this policy for separable value functions. We then furnish a dynamic programming procedure for prescribing an optimal policy for this problem. Finally, we derive analytic solutions to some special cases of the problem, and present a case study that demonstrates a possible use of the proposed approach.
Type of Medium:
Online Resource
ISSN:
1545-8490
,
1545-8504
DOI:
10.1287/deca.1050.0044
Language:
English
Publisher:
Institute for Operations Research and the Management Sciences (INFORMS)
Publication Date:
2006
detail.hit.zdb_id:
2128587-1
SSG:
3,2
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