Utilization of mathematical programming for public systems: An application of effective formation of integrated regional information networks

This paper concerns a methodological reflection on the multiobjective approach to public systems which involve group decision processes. Particular attention is given to an integrated program of regional systems which include value trade-offs between multiple objectives. The present intention is to combine the judgmental processes with the optimization processes in the ‘soft’ public systems. A two-layer approach is applied. At the first layer, each regional program is formulated in mathematical programming based on utility assessment with different regional characteristics. Each subsystem independently reflects its particular concern as a single agent. The dual optimal solutions obtained for each subsystem are treated as an index, or the theoretical prices, representing the value trade-offs among the multiple objectives. At the second layer, an effective formation of interregional cooperation for compromising the conflicting regional interests is examined. An n-person cooperative game in the characteristic function form is used to evaluate the effectiveness of the cooperation. The characteristic function for the game is derived on the incremental value of the regional benefit after the formation of a cooperation. The nucleolus and the augmented nucleolus as the solution concepts of the cooperative games are used for indicating the effectiveness of the cooperation. Finally using alternative criteria, the results in assessing the best decisions are examined comparatively.