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A framework for multi-stakeholder decision-making and conflict resolution

Abstract:

We propose a decision-making framework to compute compromise solutions that balance conflicting priorities of multiple stakeholders on multiple objectives. In our setting, we shape the stakeholder dissatisfaction distribution by solving a conditional-value-at-risk (CVaR) minimization problem. The CVaR problem is parameterized by a probability level that shapes the tail of the dissatisfaction distribution. The proposed approach allows us to compute a family of compromise solutions and generalizes multi-stakeholder settings previously proposed in the literature that minimize average and worst-case dissatisfactions. We use the concept of the CVaR norm to give a geometric interpretation to this problem and use the properties of this norm to prove that the CVaR minimization problem yields Pareto optimal solutions for any choice of the probability level. We discuss a broad range of potential applications of the framework that involve complex decision-making processes. We demonstrate the developments using a biowaste facility location case study in which we seek to balance stakeholder priorities on transportation, safety, water quality, and capital costs.