Subjective probabilities


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Subjective probabilities

Probabilities that are determined subjectively (for example, on the basis of judgment rather than statistical sampling).

Subjective Probabilities

One's personal judgment about the outcome of a particular investment. At its most extreme, relying on subjective probabilities represents the exact opposite of a formula plan, which seeks to eliminate all personal judgments and biases from investing. By definition, one cannot calculate subjective probabilities because they are based ultimately on one's feeling. Most investors rely on a combination of subjective probabilities and more objective calculations when making investment decisions.
References in periodicals archive ?
And there is no basis on which to construct subjective probabilities other than to succumb to the temptation, described so clearly by Paul Romer, to impose priors to resolve the identification problem.
However--like other biases and heuristics--the anti-inference heuristic also gives rise to systematic error; it strongly affects decisions even when the objective and subjective probabilities of the pertinent occurrence are equal according to circumstantial and direct evidence.
With this philosophy it would be easy, for example, to allow a child to give quite different answers to symmetric, experimental and subjective probabilities of obtaining a six, and to make no pedagogical use of the discrepancy between the answers.
The subjective probabilities elicited from respondents are used to fit a respondent-specific parametric distribution following the procedure described in Manski (2004).
There are many different conceptions of probability, but two are most relevant here: objective or frequentist versus subjective probabilities.
41) The most popular candidate for rigorously evaluating and combining related evidence is the Bayesian approach, utilizing subjective probabilities.
To estimate the choice model, subjective probabilities have to be elicited for the occurrence of outcomes for each major in the respondent's choice set (i.
And since, as was seen above, probability must be defined subjectively if the world is causally-deterministic, this means that the relative frequency method is only capable of producing subjective probabilities.
We check this explanation by using data on beliefs elicited as subjective probabilities and a rich set of other variables from the Health and Retirement Study.
The theories of subjective probabilities advocated by eighteenth-century English mathematician and theologian Thomas Bayes and by twentieth-century Italian statistician Bruno de Finetti are very applicable today when we assign likelihood to any future conditions or outcomes.
x+1]) using a Bayesian conditioning process is an aceptable justification, but, if the evaluation of the boundary conditions that define the characteristics of the event is wrong, then all subjective probabilities conditioned by evidence will be inappropiate.
0], as the weighted average of postgame values, with weights equal to their subjective probabilities of game outcomes, [prob.

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