47 results on '"subjective probability"'
Search Results
2. Calculating Probability
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Cleff, Thomas and Cleff, Thomas
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- 2025
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Catalog
3. Entropy and Extropy for Partial Probability Assessments on Arbitrary Families of Events
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Castronovo, Lydia, Sanfilippo, Giuseppe, Goos, Gerhard, Series Editor, Hartmanis, Juris, Founding Editor, Bertino, Elisa, Editorial Board Member, Gao, Wen, Editorial Board Member, Steffen, Bernhard, Editorial Board Member, Yung, Moti, Editorial Board Member, Destercke, Sébastien, editor, Martinez, Maria Vanina, editor, and Sanfilippo, Giuseppe, editor more...
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- 2025
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4. Defining Rationality in Security Studies: Expected Utility, Theory-Driven Reasoning, and the Vietnam War.
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Friedman, Jeffrey A.
- Abstract
In How States Think, John Mearsheimer and Sebastian Rosato argue that expected-utility maximization is too subjective to serve as the basis for making rational decisions in the realm of national security. They claim that rationality in security studies should instead be defined by whether leaders conduct deliberative, theory-driven reasoning. This essay explains why Mearsheimer and Rosato's critique of expected-utility theory is unpersuasive, and how their conception of theory-driven reasoning ignores key aspects of decision-making that national security officials can feasibly address. Lyndon Johnson's decision to take the United States to war in Vietnam provides a vivid example of how leaders can meet Mearsheimer and Rosato's criteria for rationality despite clear shortfalls of analytic reasoning. [ABSTRACT FROM AUTHOR] more...
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- 2024
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5. Overconfidence in Probability Distributions: People Know They Don't Know, but They Don't Know What to Do About It.
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Soll, Jack B., Palley, Asa B., Klayman, Joshua, and Moore, Don A.
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BUSINESS schools ,EPISTEMIC uncertainty ,JUDGMENT (Psychology) ,DECISION making ,DISTRIBUTION (Probability theory) - Abstract
Overconfidence is pervasive in subjective probability distributions (SPDs). We develop new methods to analyze judgments that entail both a distribution of possible outcomes in a population (aleatory uncertainty) and imperfect knowledge about that distribution (epistemic uncertainty). In four experiments, we examine the extent to which subjective probability mass is concentrated in a small portion of the distribution versus spread across all possible outcomes. We find that although SPDs roughly match the concentration of the empirical, aleatory distributions, people's judgments are consistently overconfident because they fail to spread out probability mass to account for their own epistemic uncertainty about the location and shape of the distribution. Although people are aware of this lack of knowledge, they do not appropriately incorporate it into their SPDs. Our results offer new insights into the causes of overconfidence and shed light on potential ways to address this fundamental bias. This paper was accepted by Yuval Rottenstreich, behavioral economics and decision analysis. Funding: Support for this research was provided by the Fuqua School of Business at Duke University and the Haas School of Business at the University of California at Berkeley. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2019.00660. [ABSTRACT FROM AUTHOR] more...
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- 2024
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6. Combining Savage and Laplace: a new approach to ambiguity.
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Diedrich, Ralf
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UTILITY functions ,DISTRIBUTION (Probability theory) ,RISK aversion ,AMBIGUITY ,AVERSION - Abstract
This paper presents a new representation of preference orderings for the study of ambiguity-related decision-making. The central feature is a preference-based decomposition of subjective probabilities that provides information about inherent ambiguity. The probability decomposition is combined with a utility function reflecting the decision-maker's attitude toward ambiguity. The proposed theory generalizes Savage's SEU and allows for a straightforward measurement of ambiguity and ambiguity aversion while keeping concepts for measuring risk and risk attitudes unaffected. For the measurement of ambiguity, concepts of probability theory can be used since decision acts can be interpreted as two-dimensional probability distributions. The proposed measure of ambiguity aversion exploits the properties of the utility function in the same way as the Arrow/Pratt measure of risk aversion. [ABSTRACT FROM AUTHOR] more...
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- 2024
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7. An alternative in deriving subjective probabilities in the futures wagering market.
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Ryan, Matt E.
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FUTURES market ,EXPECTED returns ,PROBABILITY theory - Abstract
Implied subjective probabilities from futures wagering markets are typically determined using a system known as "fair odds." Here, an alternative system of calculating subjective probabilities—"quasi‐parimutuel"—is offered. Instead of considering individual lines independent of the remainder of the wagering opportunities, the quasi‐parimutuel method considers the ratios of wagers required between lines such that a constant return is generated for every line. As a result, relative to the fair odds system, favorites (underdogs) have higher (lower) subjective probabilities, and expected returns across all wagers vary. [ABSTRACT FROM AUTHOR] more...
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- 2024
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8. An exchangeability-based finite-state axiomatization of subjective probability: An exchangeability-based finite-state axiomatization...
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Chew, Soo Hong, Sagi, Jacob S., and Wang, Wenqian
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- 2025
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9. Non-Life Insurance: Pricing
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Maggioni, Massimiliano, Turchetti, Giuseppe, Maggioni, Massimiliano, and Turchetti, Giuseppe
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- 2024
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10. The Notion of Risk and Probability
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Maggioni, Massimiliano, Turchetti, Giuseppe, Maggioni, Massimiliano, and Turchetti, Giuseppe
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- 2024
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11. The Calculus of Desire
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Bruno, Nicola and Bruno, Nicola
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- 2024
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12. The Nature of Randomness and the Element of Chance
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Hacıoğlu, Volkan and Hacıoğlu, Volkan
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- 2024
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13. Relevant Contents of System Theory and Probability Theory
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Zheng, Maosheng, Yu, Jie, Zheng, Maosheng, and Yu, Jie
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- 2024
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14. Independent postulates for subjective expected utility.
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Harju, Mikko, Liesiö, Juuso, and Virtanen, Kai
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EXPECTED utility ,MATHEMATICAL logic ,DECISION theory ,AXIOMS ,DECISION making - Abstract
Although the subjective expected utility (SEU) theory is more than 60 years old, it was recently discovered by Hartmann (Econometrica 88(1):203–205, 2020, https://doi.org/10.3982/ECTA17428) that one of the original seven postulates is redundant, i.e., it is implied by the other six postulates. In this brief communication, we show that this redundant axiom is the only one that is implied by the other axioms, thereby establishing that the remaining six postulates form an independent axiomatic system. This result further streamlines the preference assumptions underlying the SEU theory. [ABSTRACT FROM AUTHOR] more...
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- 2024
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15. Regression modeling of subjective probability of river inundation with epistemic uncertainty: a short-term panel data analysis.
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Hidaka, Ken, Ikegai, Mirai, and Masuda, Satoki
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EPISTEMIC uncertainty ,PANEL analysis ,REGRESSION analysis ,DATA analysis ,RISK perception ,KNOWLEDGE acquisition (Expert systems) ,EARTHQUAKE hazard analysis - Abstract
Lack of sufficient knowledge about flood risk can lead to "don't know" responses or non-response in risk perception surveys, and incorrect treatment of these responses can lead to bias in the results. In this study, we focus on the possibility that the "50%" response actually means "fifty-fifty" and thus reflects epistemic uncertainty in the subjective probability of river flooding. We conduct an analysis that introduces a concomitant-variable latent class model as a method to adjust for this epistemic uncertainty. The results of the analysis accounting for epistemic uncertainty suggest that risk communication, such as simulated evacuation experiences and flood-related information distribution, increases subjective probability. Moreover, the proportion of latent classes with epistemic uncertainty decreased with each successive wave of the survey, thereby suggesting that knowledge acquisition and learning through the demonstration experiment led to a reduction in epistemic uncertainty. The analysis using the evacuation decision-making model also suggested that the introduction of subjective probability contributed to improving the likelihood of the model. These results suggest that knowledge acquisition through risk communication and short-term panel survey can lead to correct risk perception estimations and influence evacuation decisions. [ABSTRACT FROM AUTHOR] more...
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- 2024
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16. The Special Theory of Probability
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Niall, Keith K., Abou-Nemeh, Catherine, Advisory Editor, Wolfe, Charles T., Series Editor, Ankeny, Rachel A., Advisory Editor, Anstey, Peter, Advisory Editor, Bellis, Delphine, Advisory Editor, Ben Saad, Meyssa, Advisory Editor, Bentouhami, Hourya, Advisory Editor, Clericuzio, Antonio, Advisory Editor, Connell, Sophia M., Advisory Editor, Daniel Eddy, Matthew, Advisory Editor, Dew, Nicholas, Advisory Editor, French, Steven, Advisory Editor, Gal, Ofer, Advisory Editor, Georgescu, Laura, Advisory Editor, Hoquet, Thierry, Advisory Editor, Montelle, Clemency, Advisory Editor, Omodeo, Pietro Daniel, Advisory Editor, Palmerino, Carla Rita, Advisory Editor, Patton, Lydia, Advisory Editor, Rasmussen, Nicholas, Advisory Editor, Regier, Jonathan, Advisory Editor, Rey, Anne-Lise, Advisory Editor, Schilt, C.J., Advisory Editor, Schuster, John, Advisory Editor, Seth, Suman, Advisory Editor, Tho, Tzuchien, Advisory Editor, Willey, Angela, Advisory Editor, Yeo, Richard, Advisory Editor, and Niall, Keith K. more...
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- 2023
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17. Decision Making Under Uncertainty—Basic Concepts and Techniques
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Li, Wingsun and Li, Wingsun
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- 2023
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18. The concept of probability, crisis in statistics, and the unbearable lightness of Bayesing
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Boris Čulina
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crisis in statistics ,kolmogorov's concept of probability ,interpretations of probability ,subjective probability ,bayesian statistics ,Philosophy. Psychology. Religion ,Social Sciences - Abstract
Education in statistics, the application of statistics in scientific research, and statistics itself as a scientific discipline are in crisis. Within science, the main cause of the crisis is the insufficiently clarified concept of probability. This article aims to separate the concept of probability which is scientifically based from other concepts that do not have this characteristic. The scientifically based concept of probability is Kolmogorov’s concept of probability models together with the conditions of their applicability. Bayesian statistics is based on the subjective concept of probability, and as such can only have a heuristic value in searching for the truth, but it cannot and must not replace the truth. The way out of the crisis should take Kolmogorov and Bayesian analysis as elements, each of which has a well-defined and limited use. Only together with qualitative analysis and other types of quantitative analysis, and combined with experiments, they can contribute to reaching correct conclusions. more...
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- 2023
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19. Subjective expected utility through stochastic independence.
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Grabisch, Michel, Monet, Benjamin, and Vergopoulos, Vassili
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EXPECTED utility ,PROBABILITY measures ,PROBABILITY theory ,AXIOMS ,MATHEMATICS - Abstract
This paper studies decision-making in the face of two stochastically independent sources of uncertainty. It characterizes axiomatically a Subjective Expected Utility representation of preferences where subjective beliefs consist of a product probability measure. The two key axioms in this characterization both involve some behavioral notions of stochastic independence. Our result can be understood as a purely subjective version of the Anscombe and Aumann (Ann Math Stat 34:199–205, 1963) theorem that avoids the controversial use of exogenous probabilities by appealing to stochastic independence. We also obtain an extension to Choquet Expected Utility representations. [ABSTRACT FROM AUTHOR] more...
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- 2023
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20. EXPECTED UTILITY FOR PROBABILISTIC PROSPECTS AND THE COMMON RATIO PROPERTY.
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LAHIRI, Somdeb
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EXPECTED utility ,COMMONS ,EXISTENCE theorems ,UTILITY functions ,APATHY - Abstract
We prove the existence of an expected utility function for preferences over probabilistic prospects satisfying Strict Monotonicity, Indifference, the Common Ratio Property, Substitution and Reducibility of Extreme Prospects. The example in [1] that is inconsistent with the existence of a von Neumann-Morgenstern for preferences over probabilistic prospects, violates the Common Ratio Property. Subsequently, we prove the existence of expected utility functions with piecewise linear Bernoulli utility functions for preferences that are piece-wise linear. For this case a weaker version of the Indifference Assumption that is used in the earlier existence theorems is sufficient. We also state analogous results for probabilistic lotteries. We do not require any compound prospects or mixture spaces to prove any of our results. In the third last section of this paper, we "argue" that the observations related to Allais paradox, do not constitute a violation of expected utility maximization by individuals, but is a likely manifestation of individuals assigning (experiment or menu-dependent?) subjective probabilities to events which disagree with their objective probabilities. [ABSTRACT FROM AUTHOR] more...
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- 2023
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21. Fuzzy Models As a Formalization of Expert's Evaluative Knowledge.
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Yakhyaeva, G. E. and Palchunova, O. D.
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Evaluative knowledge of an object domain can be represented not only as an objective (statistical) probability, but also as a subjective (expert) probability. Expert evaluations may be incomplete and uncoordinated with each other. An instrument is needed to check the coordination of expert knowledge. The paper presents a formalization of the subjective interpretation of probability in the language of the theory of fuzzy models. This allows us to formulate coordination criteria for evaluative knowledge obtained from experts. Various properties of coordinated evaluative knowledge are described, the concept of a minimal fuzzy model coordinated with a given evaluative knowledge is considered, and the uniqueness criteria for such a model are investigated. [ABSTRACT FROM AUTHOR] more...
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- 2023
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22. Study of the Effectiveness of Hypopressive Abdominal Training as Physiotherapeutic Treatment in Lumbosciatica in Adults Using Neutrosophic Statistics.
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Reales C., Lisbeth Josefina, Pastor, Victoria E., Aldaz Sánchez, Rosa E., and Ayala, Josselyn G. Bonilla
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ADULTS ,PAIN management ,NEUTROSOPHIC logic ,PROBABILITY theory ,T-test (Statistics) - Abstract
This work was developed at the Dr. Publio Escobar Gómez Hospital in Ecuador. The objective is to reduce pain and tone the abdominal and back muscles in adults with lumbosciatica through the application of hypopressive abdominal training to help reintroduce the adult to their work and social activities. We worked with a population of 25 male and female adult patients, with an age range from 30 to 50 years old. To process the collected data, we determined that classical statistics are too restrictive in terms of the hypotheses to fulfill. For example, the initial evaluation employing the Visual Analogue Scale (VAS) that assesses the intensity of pain is subjective and depends on the pain threshold of each patient, moreover, the size of the population is not large (<30), therefore it is not possible to carry out a study with the rigor required by classical statistics to infer. That is why we have decided to use neutrosophic statistics to process the data, which will consist of pain scales in the form of intervals, which will contain indeterminacy. The statistical test selected was the T-test for paired samples. In addition to the fact that neutrosophic statistics admit the principles of De Finetti's subjective probabilities and the statistics derived from it, where objective evidence through a random sample is not needed to reach valid conclusions. [ABSTRACT FROM AUTHOR] more...
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- 2023
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23. Shackle's analysis of choice under uncertainty: its strengths, weaknesses and potential synergies with rival approaches.
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Earl, Peter E.
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PROSPECT theory ,EXPECTANCY theories ,IDEA (Philosophy) - Abstract
This paper offers a constructively critical examination of George Shackle's theory of expectations and decision-making under uncertainty, a theory that Shackle developed because he questioned the relevance of objective probabilities as foundations for expectations. His theory is cast in terms of degrees of possibility and potential for surprise associated with disbelief that comes from imagining things that could prevent outcomes from eventuating. His idea that there may be ranges of mutually exclusive "perfectly possible" events has posed a problem for blending his thinking with the subjective probability approach, but here it is argued that this idea is flawed. Shackle's theory of how expectations are deployed in making choices involves a reference-dependent theory of attention that results in focus on best-case and worst-case pairs of outcomes for each scheme. The paper identifies potential synergies with this idea and prospect theory and explores emotion- and satisficing-based perspectives as well as Shackle's formal analysis of how focus outcomes are used in ranking rival schemes of action. [ABSTRACT FROM AUTHOR] more...
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- 2023
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24. Development of an expert judgement debiasing method for assessing levee failure probabilities.
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Carvajal, Claudio, Vuillet, Marc, Peyras, Laurent, Hathout, Michel, and Diab, Youssef
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JUDGMENT (Psychology) , *LEVEES , *PROBABILITY theory , *NUMERICAL calculations , *RISK assessment - Abstract
Expert judgment plays an essential role in assessing the safety of levees, since these very long structures are generally old, few data are available for them, and they are subject to complex failure mechanisms. Expert judgement is required to assess the failure probabilities of levees when carrying out risk analysis studies. However, expert judgement is subject to biases that are highly likely to impair the quality of the probabilistic assessments obtained. This article presents a method for reducing biases in expert opinion, illustrated by its application to the case of an existing levee. Initially, the method comprises the calibration of the opinions of a panel of six experts based on the results of a quantitative analysis applied to 30 levee cross-sections for which numerical calculations were performed. It then proposes a procedure to debias expert assessments using bias correction coefficients. Regarding its application, the assessments made by the experts were debiased for 30 calibration variables. The correction coefficients obtained were then applied for the assessment of 10 variables of interest. The results show a significant reduction of biases, associated with a readjustment of the uncertainty intervals given by the experts. [ABSTRACT FROM AUTHOR] more...
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- 2023
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25. Variations on a theme by Rachlin: Probability discounting.
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Killeen, Peter R.
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INTERTEMPORAL choice , *DELAY discounting (Psychology) , *UTILITY theory , *PROBABILITY theory - Abstract
Rachlin and colleagues laid the groundwork for treating the discounting of probabilistic goods as a variant of the discounting of delayed goods. This approach was seminal for a large body of subsequent research. The present paper finds the original development problematic: In converting probability to delay, the authors incorrectly dropped trial duration. The subsumption of probability by delay is also empirically questionable, as those are different functions of variables such as magnitude of outcome and commodity versus money. A variant of Rachlin's theme treats human discounting studies as psychophysical matching experiments, in which one compound stimulus is adjusted to equal another. It is assumed that a function of amount (its utility) is multiplied by a function of probability (its weight). Conjoint measurement establishes the nature of these functions, yielding a logarithmic transform on amount, and a Prelec function on probability. This model provides a good and parsimonious account of probability discounting in diverse data sets. Variant representations of the data are explored. By inserting the probabilistically discounted utility into the additive utility theory of delay discounting, a general theory of probabilistic intertemporal choice is achieved. [ABSTRACT FROM AUTHOR] more...
- Published
- 2023
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26. Desirability relations in Savage's model of decision making.
- Author
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Samet, Dov and Schmeidler, David
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DECISION making ,EXPECTED utility ,UTILITY functions ,PROBABILITY theory ,PROPOSITION (Logic) - Abstract
We propose a model of an agent's probability and utility that is a compromise between Savage (The foundations of statistics, Wiley, 1954) and Jeffrey (The Logic of Decision, McGraw Hill, 1965). In Savage's model the probability–utility pair is associated with preferences over acts which are assignments of consequences to states. The probability is defined on the state space, and the utility function on consequences. Jeffrey's model has no consequences, and both probability and utility are defined on the same set of propositions. The probability–utility pair is associated with a desirability relation on propositions. Like Savage we assume a set of consequences and a state space. However, we assume that states are comprehensive, that is, each state describes a consequence, as in Aumann (Econometrica 55:1–18, 1987). Like Jeffrey, we assume that the agent has a preference relation, which we call desirability, over events, which by definition involves uncertainty about consequences. For a given probability and utility of consequences, the desirability relation is presented by conditional expected utility, given an event. We axiomatically characterize desirability relations that are represented by a probability–utility pair. We characterize the family of all the probability–utility pairs that represent a given desirability relation. [ABSTRACT FROM AUTHOR] more...
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- 2023
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27. On Applicability of Quantum Formalism to Model Decision Making: Can Cognitive Signaling Be Compatible with Quantum Theory?
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Khrennikov, Andrei
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DECISION making , *QUANTUM measurement , *QUANTUM theory , *SIZE of brain , *SPEED of light , *ELECTROMAGNETIC waves - Abstract
This note is devoted to the problem of signaling (marginal inconsistency) in the Bell-type experiments with physical and cognitive systems. It seems that in quantum physics, this problem is still not taken seriously. Only recently have experimenters started to check the signaling hypothesis for their data. For cognitive systems, signaling was statistically significant in all experiments (typically for decision making) performed up to today. Here, one cannot simply ignore this problem. Since signaling contradicts the quantum theory of measurement for compatible observables, its statistical significance in experiments with humans can be considered as an objection for quantum-like modeling—applications of quantum theory to cognition, decision making, psychology, economics and finance, social and political science. In this paper, we point to two possible sources of signaling generation that are consistent with quantum measurement theory. Thus, the signaling objection for quantum-like modeling is not catastrophic. One of these sources is the direct physical signaling about selection of experimental settings, questions or tasks in quantum-like studies. Another possible source is a state modification dependent on experimental settings. The latter was a rather common source of signaling in quantum physics. Since the physical size of the brain is very small comparing with the light velocity, it seems to be impossible to prevent the direct physical signaling (with electromagnetic waves) between the brain's areas processing two questions a and b . However, if, for these questions, not the electromagnetic waves, but electrochemical communication plays the crucial role, the experimenter may hope to make signaling weaker by answering the questions faster. The problem of question-dependent mental state modification seems to be solvable via smarter experimental design. This paper can be useful both for physicists interested in quantum foundations and for researchers working in quantum-like studies, e.g., applying the quantum theory to model decision making or psychological effects. This paper is solely about quantum theory. Thus, we do not consider general contextual probabilistic models. [ABSTRACT FROM AUTHOR] more...
- Published
- 2022
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28. Prerationality as Avoiding Predictably Regrettable Consequences.
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Hammond, Peter J.
- Abstract
Copyright of Revue Economique is the property of Fondation Nationale des Sciences Politiques and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) more...
- Published
- 2022
29. On revision of the Guide to the Expression of Uncertainty in Measurement: Proofs of fundamental errors in Bayesian approaches
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R. Willink
- Subjects
aleatory uncertainty ,epistemic uncertainty ,logical probability ,subjective probability ,combination of data ,Electric apparatus and materials. Electric circuits. Electric networks ,TK452-454.4 - Abstract
The process of revising the Guide to the Expression of Uncertainty in Measurement (GUM) is ongoing. A successful revision must be theoretically sound, so it must be based on a recognized paradigm for scientific data analysis. The major candidate paradigms of statistical inference are the frequentist paradigm — where probability statements are only used to describe the frequency behaviour of processes — and the Bayesian paradigm — where probability statements are also used to describe the degree of belief of the speaker and where the subject of that belief may be the unknown value of a constant. These paradigms are incompatible, and there remains disagreement about which should form the basis of the practical procedures advocated in a revised GUM. This paper uses published results to examine foundational ideas in two different Bayesian approaches, which themselves are inconsistent at a basic, conceptual, level. So-called ‘objective’ Bayesian statistics is based on the premise that a probability distribution can accurately represent a set of information about a constant, which is a premise of the system of analysis currently favoured by the BIPM. This premise is proven to lead to a logical contradiction, which renders the theory untenable. In contrast, subjective Bayesian methods are theoretically satisfactory if they are used in their proper context, which is the context of personal decision-making. But simple examples show that the use of subjective probability in a client-centred measurement can lead to unacceptable results. These examples involve the mixing of epistemic uncertainty (the uncertainty of personal doubt) with aleatory uncertainty (the uncertainty of an unpredictable physical process). They show that these two types of uncertainty cannot always be treated as one, which is a conclusion with profound implications for the role of Bayesian statistics in science. The analysis in this paper also involves a discussion of the ‘meaning’ of probability, which has been a divisive subject for many years. It is argued here that the implied question is inappropriate: the relevant question is not “what does probability mean?” but “what role can probability meaningfully and accurately play?” The results about objective and subjective Bayesian statistics discussed in this paper support the conclusion that a sound and practical system of analysis must be based on the frequency role of probability. more...
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- 2022
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30. Ergodic theorems for dynamic imprecise probability kinematics.
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Caprio, Michele and Mukherjee, Sayan
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- *
KINEMATICS , *PROBABILITY theory , *ERGODIC theory - Abstract
We formulate an ergodic theory for the (almost sure) limit P E ˜ co of a sequence (P E n co) of successive dynamic imprecise probability kinematics (DIPK, introduced in [10]) updates of a set P E 0 co representing the initial beliefs of an agent. As a consequence, we formulate a strong law of large numbers. [ABSTRACT FROM AUTHOR] more...
- Published
- 2023
- Full Text
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31. The Scope of HIV Uncertainty
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Trinitapoli, Jenny, author
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- 2023
- Full Text
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32. Risk Perception, Learning, and Willingness to Pay to Reduce Heart Disease Risk.
- Author
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Dickie, Mark, Adamowicz, Wiktor, Gerking, Shelby, and Veronesi, Marcella
- Subjects
RISK perception ,WILLINGNESS to pay ,HEART diseases ,STATED preference methods - Abstract
The paper investigates the validity of individual perceptions of heart disease risks, and examines how information and risk perceptions affect marginal willingness to pay (MWTP) to reduce risk, using data from a stated preference survey. Results indicate that risk perceptions held before receiving risk information are plausibly related to objective risk factors and reflect individual-specific information not found in aggregate measures of objective risk. After receiving information, individuals' updates of prior risk assessments are broadly consistent with Bayesian learning. Perceived heart disease risks thus satisfy construct validity and provide a valid basis for inferring MWTP to reduce risk. Consistent estimators of the relationship of MWTP to endogenously perceived risk are developed. Estimating MWTP based on objective rather than subjective risks causes misleading inferences about benefits of risk reduction. An empirical case study shows that estimated benefits may be as much as 60–98 % higher when estimated using individuals' heterogeneous perceptions of risk than when using aggregate estimates of objective risk. The main contributions include assessing the validity of risk perceptions and their updating, consistently estimating the relationship between MWTP and endogenously perceived risk, and demonstrating the importance of employing risk perception information for accurate benefit measurement. [ABSTRACT FROM AUTHOR] more...
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- 2022
- Full Text
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33. THE COURTIERS OF CONFUSION: A REPLY TO WYSOCKI AND BLOCK.
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CROVELLI, MARK R.
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COURTS & courtiers ,PROBABILITY theory ,ARGUMENT ,EXHIBITIONS ,BROTHERS - Abstract
Copyright of Procesos de Mercado is the property of Procesos de Mercado. Revista Europea de Economia Politica and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) more...
- Published
- 2022
34. Skepticism and Credulity: A Model and Applications to Political Spin, Belief Formation, and Decision Weights.
- Author
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Campbell, James David
- Subjects
SKEPTICISM ,SPIN crossover ,PROBABILITY theory - Abstract
In this paper I model a decision maker who forms beliefs and opinions using a dialectic heuristic that depends on their degree of skepticism or credulity. In an application to political spin, two competing parties choose how to frame commonly observed evidence. If the receiver is sufficiently credulous, equilibrium spin is maximally extreme and generates short, superficial news cycles. When receivers vary in their skepticism, there is partisan sorting by skepticism parameter: the more credulous group systematically favors one party and displays hostility to evidence and a media they see as biased. In behavioral applications in which the frames arise from the decision maker's internal deliberation, a decision maker with the same credulous nature would display known behavioral anomalies in forming beliefs and forming decision weights from stated probabilities. The dialectic model therefore captures a simple psychological mechanism and matches closely some stylized facts across these three disparate applications. [ABSTRACT FROM AUTHOR] more...
- Published
- 2022
- Full Text
- View/download PDF
35. Peirce, Pedigree, Probability.
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Stewart, Rush T. and Sterkenburg, Tom F.
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GENEALOGY , *PROBABILITY theory , *THEORY of knowledge , *SUBJECTIVITY , *CRITICISM , *VIRTUE epistemology - Abstract
An aspect of Peirce's thought that might still be underappreciated is his resistance to what Levi calls pedigree epistemology, i.e., to the idea that a central focus in epistemology should be the justification of current beliefs. Somewhat more widely appreciated is his rejection of the subjective view of probability. We argue that Peirce's criticisms of subjectivism, to the extent that they grant that such a conception of probability is viable at all, revert back to pedigree epistemology. A thoroughgoing rejection of pedigree in the context of probabilistic epistemology, however, does challenge prominent subjectivist responses to the problem of the priors. [ABSTRACT FROM AUTHOR] more...
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- 2022
- Full Text
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36. Infinite frequency principles of direct inference.
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Ackermans, Lennart B.
- Abstract
According to an infinite frequency principle, it is rational, under certain conditions, to set your credence in an outcome to the limiting frequency of that outcome if the experiment were repeated indefinitely. I argue that most infinite frequency principles are undesirable in at least one of the following ways: (1) accepting the principle would lead you to accept bets with sure losses, (2) the principle gives no guidance in the case of deterministic experiments like coin tosses and (3) the principle relies on a metaphysical property, ‘chanciness’, whose necessary and sufficient conditions are unknown. I show that a frequency principle that is based on the principal principle suffers from problems related to the definition of ‘chance’ or ‘chanciness’, which could lead to all three of the above problems. I introduce a version of the infinite frequency principle that does not rely on a notion of chance or chanciness and does not suffer from any of these problems. [ABSTRACT FROM AUTHOR] more...
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- 2022
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37. Categorical Versus Graded Beliefs
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Franz Dietrich
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logic vs. rational choice theory ,yes/no belief vs. graded belief ,subjective probability ,belief binarization ,lottery paradox ,impossibility theorem ,Psychology ,BF1-990 - Abstract
This essay discusses the difficulty to reconcile two paradigms about beliefs: the binary or categorical paradigm of yes/no beliefs and the probabilistic paradigm of degrees of belief. The possibility for someone to hold beliefs of both types simultaneously is challenged by the lottery paradox, and more recently by a general impossibility theorem by Dietrich and List. The nature, relevance, and implications of the tension are explained and assessed. more...
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- 2022
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38. Categorical Versus Graded Beliefs.
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Dietrich, Franz
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RATIONAL choice theory - Abstract
This essay discusses the difficulty to reconcile two paradigms about beliefs: the binary or categorical paradigm of yes/no beliefs and the probabilistic paradigm of degrees of belief. The possibility for someone to hold beliefs of both types simultaneously is challenged by the lottery paradox, and more recently by a general impossibility theorem by Dietrich and List. The nature, relevance, and implications of the tension are explained and assessed. [ABSTRACT FROM AUTHOR] more...
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- 2022
- Full Text
- View/download PDF
39. The Emerging Interplay Between Subjective and Objective Notions of Probability in Young Children
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Kazak, Sibel and Leavy, Aisling
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- 2022
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40. Three Essays in Experimental Economics
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Bradley, Austin Edward
- Subjects
- Economics, Experimental Economics, Behavioral Economics, Cheap Talk, Communication, Natural Language Processing, Free-form Communication, Subjective Probability, Gambler's Fallacy, Hot Hand Fallacy, Real-Effort, Trust
- Abstract
The experiments presented and analyzed in this dissertation concern two well-established phenomena in behavioral economics: that human decision makers hold biased beliefs about probability and that free-form communication between economic agents promotes cooperation far in excess of what standard theory predicts. First, Chapter 2 studies subjective probability, focusing on the well-established existence of both the Hot Hand and Gambler's Fallacies — the false expectation of positive and negative autocorrelation, respectively. Both biases are prevalent throughout a wide variety of real-world contexts; what causes a person to favor one over the other? We conduct an experiment in which we observe fully informed subjects switching between the Hot Hand and Gambler's Fallacies when predicting future outcomes of mathematically identical sequences. Subjects exhibit the Gambler's Fallacy when predicting single outcomes but favor the Hot Hand when asked explicitly to estimate probabilities. Connecting our results to existing theory suggests that very subtle changes in framing lead decision makers to employ substantially different approaches to form predictions. The remainder of this dissertation studies cheap talk communication between human subjects playing incentivised trust games. In Chapter 3, we study free-form communication using a dataset of over 1000 messages sent between participants in a laboratory Trust game. We employ Natural Language Processing to systematically generate meaningful partitions of the messages space which we can then examine with established regression approaches. Our investigation reveals features correlated with trust that have not previously been considered. Most notably, highly detailed, specific promises establish trust more effectively than other messages which signal the same intended action. Additionally, we observe that the most and least trusted messages in our dataset differ starkly in their quality. Highly trusted messages are longer, more detailed, and contain fewer grammatical errors whereas the least trusted messages tend to be brief and prone to errors. In Chapter 4, we examine whether the difference is message quality affects trust by acting as a signal of effort. We report the results of an experiment designed to test whether promises which require higher levels of effort result in greater trust from their recipients. We find that more costly promises lead recipients to trust more frequently. However, there is no corresponding, significant difference in the trustworthiness of their senders. Further, when asked their beliefs explicitly, recipients do not believe that higher cost promises are more likely to be trustworthy. This presents a potential challenge to our understanding of trust between economic decision makers. If effort increases trust without altering receivers' beliefs, receivers must be concerned with factors other than their own payoff maximization. We conclude by presenting a follow-up experiment where varying effort cost cannot convey the sender's intentions, however, the results are inconclusive. more...
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- 2024
41. Revisiting representativeness heuristic classic paradigms: Replication and extensions of nine experiments in Kahneman and Tversky (1972).
- Author
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Mayiwar L, Wan KH, Løhre E, and Feldman G
- Abstract
Kahneman and Tversky showed that when people make probability judgements, they tend to ignore relevant statistical information (e.g., sample size) and instead rely on a representativeness heuristic, whereby subjective probabilities are influenced by the degree to which a target is perceived as similar to (representative of) a typical example of the relevant population, class or category. Their article has become a cornerstone in many lines of research and has been used to account for various biases in judgement and decision-making. Despite the impact this article has had on theory and practice, there have been no direct replications. In a pre-registered experiment ( N = 623; Amazon MTurk on CloudResearch), we conducted a replication and extensions of nine problems from Kahneman and Tversky's 1972 article. We successfully replicated eight out of the nine problems. We extended the replication by examining the consistency of heuristic responses across problems and by examining decision style as a predictor of participants' use of the representativeness heuristic. Materials, data, and code are available on: https://osf.io/nhqc4/., Competing Interests: Declaration of conflicting interestsThe author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article. more...
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- 2024
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42. ТЕОРЕТИКО-ЙМОВІРНІСНИЙ ПІДХІД ДО МОДЕЛЮВАННЯ НЕВИЗНАЧЕНОСТІ В ЕКОНОМІЧНІЙ ДІЯЛЬНОСТІ У ПЕРСПЕКТИВІ ІСТОРИЧНОГО ШЛЯХУ ЙОГО РОЗВИТКУ
- Subjects
невизначеність ,теорія нечітких множин ,objective probability ,теорія ймовірностей ,об’єктивна ймовірність ,інтервальний аналіз ,probability theory ,stochastic uncertainty ,subjective probability ,fuzzy set theory ,non-stochastic uncertainty ,стохастична невизначеність ,суб’єктивна ймовірність ,uncertainty ,interval analysis ,нестохастична невизначеність - Abstract
The article is devoted to the problem of modeling uncertainty in the field of economics and business based on probability theory. Specifically, the purpose of the study was to review the features, potential and limitations of probability theory as a means of quantitative analysis and modeling of uncertainty in economic activity from the point of view of the historical path of its formation and development. As part of this, the key events of the origin and development of probability theory, key aspects of substantiating its logical foundations and building it as a purely mathematical discipline were considered. Particular attention was paid to the issue of distinguishing between stochastic and non-stochastic uncertainty in the plane of practical situations of economic decision-making. As one of the important methodological emphases of the work, the thesis that when the situation of making an economic decision is burdened by non-stochastic uncertainty of one or another origin, it is justified and useful to turn to an expert approach. At the same time, the theory of subjective probabilities, the theory of fuzzy sets, and interval analysis stand out as the system-forming components of the theoretical basis of the latter., Стаття присвячена проблемі моделювання невизначеності у сфері економіки та бізнесу на основі теорії імовірностей. Конкретно, мета дослідження полягала в огляді особливостей, потенціалу та обмежень теорії імовірностей як засобу кількісного аналізу та моделювання невизначеності в економічній діяльності з точки зору історичного шляху її становлення та розвитку. У межах цього розглянуто вузлові події зародження та розвитку теорії імовірностей, ключові аспекти процесу обґрунтування її логічних основ та побудови як суто математичної дисципліни. Окрему увагу приділено питанню розмежування стохастичної і нестохастичної невизначеності у площині практичних ситуацій прийняття економічних рішень. Як один із важливих методологічних акцентів роботи виступає теза, що в разі, якщо ситуація прийняття економічного рішення обтяжена нестохастичною невизначеністю, різного походження, виправданим і корисним вбачається звернення до експертного підходу. При цьому як системотвірні складові теоретичного базису останнього виокремлюються теорія суб’єктивних імовірностей, теорія нечітких множин та інтервальний аналіз. more...
- Published
- 2023
43. Statistical Interpretation of Evidence: Bayesian Analysis
- Author
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Franco Taroni, Colin Aitken, and Alex Biedermann
- Subjects
Bayes' rule ,Frequentist probability ,Bayes’ factor ,Bayes’ theorem ,Categorical data ,Continuous data ,Decision theory ,Degree of belief ,Evidence evaluation ,Fallacy ,Interpretation ,Likelihood ratio ,Posterior probability ,Prior probability ,Probability theory ,Subjective probability ,Utility ,computer.software_genre ,Bayesian inference ,Empirical probability ,Epistemology ,Bayes' theorem ,Dempster–Shafer theory ,Inductive probability ,Data mining ,computer ,Probability interpretations ,Mathematics - Abstract
Probability theory provides the general framework within which assignments of probabilities of past, present, and future events are coherently modified in the light of observed events or, more generally, new information. Forensic scientists, as an illustrative example, routinely face tasks of reasoning under uncertainty when they seek to assist members of the judiciary in evaluating or interpreting the meaning of items of scientific evidence. As a consequence of the laws of probability theory and related concepts, Bayes’ theorem is the key rule according to which to conduct such reasoning in order to comply with the requirement of rationality. This quantification, though, does not represent the end of the matter as the forensic scientist may also be confronted with questions of how to make a rational choice amongst alternative courses of action. This article presents the role of Bayes’ theorem, and its extension to decision analysis, in categorical and continuous data analysis in forensic science applications. It emphasizes the importance of propositional hierarchies, the role of background information, the interpretation of probability as personal degrees of belief and the personal quantification of the consequences of decisions. The discussion also includes a sketch of some common pitfalls of intuition associated with probabilistic reasoning in legal contexts. more...
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- 2023
44. Когнітивний підхід до калібрування номінальних суджень аналітика розвідувальної інформації
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калібрування ,cognitivity ,номінальне судження ,subjective probability ,розвідувальна інформація ,суб’єктивна ймовірність ,когнітивність ,intelligence ,nominal judgment ,calibration - Abstract
The results of the work of intelligence analysts can be presented in the form of verbal judgments and (or) in numerical form. Currently, the dominant form of representation is verbal judgments. The article analyses the advantages and disadvantages of this form and shows, in particular, that such an approach creates certain difficulties in cases where a combination of different judgments is required to make a decision. Therefore, the authors have developed a cognitive approach to the calibration of the nominal judgments of the intelligence analyst, which is distinct from other approaches by the personification of the process of judgment calibration and by conversion to subjective point probabilities. The essence of the proposed cognitive approach is described, software for its implementation is developed. An example of the application of the developed approach to solve a typical problem is given., Результати роботи аналітиків розвідувальної інформації можуть бути представлені у формі словесних суджень та (або) в числовій формі. На даний час домінуючою формою представлення є словесні судження. У статті проаналізовано переваги й недоліки такої форми і показано, зокрема, що подібний підхід утворює певні складнощі у випадках, коли для прийняття рішення потрібне комбінування різних суджень. Тому авторами розроблений когнітивний підхід до калібрування номінальних суджень аналітика розвідувальної інформації, особливостями якого є персоніфікація процесу калібрування суджень і вихід на точкові суб’єктивні ймовірності. Описано зміст запропонованого когнітивного підходу, розроблено програмне забезпечення для його реалізації. Наведено приклад застосування розробленого підходу для розв’язання типової задачі. more...
- Published
- 2022
45. DTU: Distributions of Temperatures from an Uncertain City
- Author
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Moore, Don, Klayman, Joshua, Soll, Jack, and Palley, Asa
- Subjects
Overconfidence ,Business ,Social and Behavioral Sciences ,Subjective probability - Abstract
This experiment is one in a series examining how subjective probability distributions respond to epistemic and aleatory uncertainty. We are interested in comparing empirical probability distributions with subjective probability distributions to ask whether subjective beliefs are overly precise. The present study examines how people combine uncertainty from aleatory and epistemic sources. more...
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- 2022
- Full Text
- View/download PDF
46. Consumers interpretation of different quantitative terms - systematic review protocol
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Johnson, Maurice, Sachar, Jeannine, Zanditon, Rebekah, Yount, Naomi, Osafo-Darko, Benedicta, and Burns, Willow
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health risk communication ,Health Communication ,Communication ,Social and Behavioral Sciences ,behavioral disciplines and activities ,health literacy ,numeracy ,health care economics and organizations ,subjective probability - Abstract
This is a registration of a systematic review on how consumers interpret quantitative and statistical terms and phrases when making health decisions.
- Published
- 2022
- Full Text
- View/download PDF
47. Development of an expert judgement debiasing method for assessing levee failure probabilities
- Author
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Claudio Carvajal, Marc Vuillet, Laurent Peyras, Michel Hathout, Youssef Diab, LAB'URBA (LAB'URBA), Université Paris-Est Créteil Val-de-Marne - Paris 12 (UPEC UP12)-Université Gustave Eiffel, Risques, Ecosystèmes, Vulnérabilité, Environnement, Résilience (RECOVER), and Aix Marseille Université (AMU)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE) more...
- Subjects
[SHS.ARCHI]Humanities and Social Sciences/Architecture, space management ,Environmental Engineering ,bias ,mechanical reliabilityanalysis ,levees ,heuristics ,expert judgement ,debiasing ,Civil and Structural Engineering ,Subjective probability - Abstract
International audience; Expert judgment plays an essential role in assessing the safety of levees,since these very long structures are generally old, few data are availablefor them, and they are subject to complex failure mechanisms. Expertjudgement is required to assess the failure probabilities of levees when car-rying out risk analysis studies. However, expert judgement is subject tobiases that are highly likely to impair the quality of the probabilistic assess-ments obtained. This article presents a method for reducing biases inexpert opinion, illustrated by its application to the case of an existinglevee. Initially, the method comprises the calibration of the opinions of apanel of six experts based on the results of a quantitative analysis appliedto 30 levee cross-sections for which numerical calculations were performed.It then proposes a procedure to debias expert assessments using bias cor-rection coefficients. Regarding its application, the assessments made by theexperts were debiased for 30 calibration variables. The correction coeffi-cients obtained were then applied for the assessment of 10 variables ofinterest. The results show a significant reduction of biases, associated witha readjustment of the uncertainty intervals given by the experts. more...
- Published
- 2022
- Full Text
- View/download PDF
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