The Analytic Hierarchy Process and utility theory: Ratio scales and interval scales

Rozann Saaty
Creative Decisions Foundation
United States

Publication date: Jul, 1996

Journal: Proceedings of the Fourth International Symposium on the Analytic Hierarchy Process (ISAHP’96)
- Pages: 12-15

Abstract: This paper is a brief summary of the successful workability of the Analytic Hierarchy Process (All!') free of problems and paradoxes. As a theory of ratio scale measurement, the AHP has found multiple and diverse applications in priority setting, decision making, planning , resource allocation, forecasting and prediction, and in conflict resolution. Contrary to prevailing theory about impossibility, the AHP approach has been shown to lead to the possibility of constructing a reality capturing a group priority function which also captures the true preferences of the individuals and allows for different individual powers. Using the AHP, one can deduce Bayes' Theorem, considered important and basic in probability prediction particularly in medical diagnosis, but not without limitations and difficulties. Rank reversals found to happen frequently in practice are allowed for in the theory of the AHP, but not for example in Utility Theory. This paper is about the far reach of the AHP with an absence of paradoxes.

Keywords: Ratio scale, Interval scale, AHP, Analytic Hierarchy Process, Utility theory