Towards a genetic direct least squares prioritization method for pairwise reciprocal matrices: Application of asset portfolio selection

Kevin Kam Fung Yuen*

*Corresponding author for this work

Research output: Chapter in Book or Report/Conference proceedingConference Proceedingpeer-review

Abstract

Analytic Hierarchy Process is a popular decision tool that ranks the aggregated results from prioritizing the pairwise reciprocal matrices judged by the users. Saaty's Eigen method for prioritizing pairwise reciprocal matrix leads to the possibility of rank reversal, and is still one of the unsettled issues, although many applications of this method have been made. This study proposes the genetic direct least squares prioritization (GDLSP) method to solve the pairwise reciprocal matrices. The direct least squares prioritization (GDLSP) method produces less total square variance between ground pairwise reciprocal matrix and its prioritization results. Genetic algorithm is a promising method to effectively solve the direct least squares problem with proposed design to handle the DLS constraint. A financial investment problem regarding asset portfolio selection using Saaty's Eigen method is revised by the proposed method.

Original languageEnglish
Title of host publicationProceedings of 2016 International Conference on Machine Learning and Cybernetics, ICMLC 2016
PublisherIEEE Computer Society
Pages275-279
Number of pages5
ISBN (Electronic)9781509003891
DOIs
Publication statusPublished - 2 Jul 2016
Event2016 International Conference on Machine Learning and Cybernetics, ICMLC 2016 - Jeju Island, Korea, Republic of
Duration: 10 Jul 201613 Jul 2016

Publication series

NameProceedings - International Conference on Machine Learning and Cybernetics
Volume1
ISSN (Print)2160-133X
ISSN (Electronic)2160-1348

Conference

Conference2016 International Conference on Machine Learning and Cybernetics, ICMLC 2016
Country/TerritoryKorea, Republic of
CityJeju Island
Period10/07/1613/07/16

Keywords

  • Analytic Hierarchy Process
  • Asset Allocation
  • Constrained Genetic Algorithm
  • Pairwise comparison
  • Prioritization

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