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The effect of probabilities on the subjective evaluation of lotteries

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Published by M.I.T.] in [Cambridge .
Written in English


  • Utility theory.,
  • Lotteries.

Book details:

Edition Notes

Statement[by] Uday S. Karmarkar.
SeriesM.I.T. Alfred P. Sloan School of Management. Working papers -- 698-74, Working paper (Sloan School of Management) -- 698-74.
The Physical Object
Pagination[2], 37 leaves
Number of Pages37
ID Numbers
Open LibraryOL17994010M

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The present experiment was designed to measure the effects of two psychological variables upon both the subjective probability and overall appeal of lottery gambling games. Results confirmed the hypothesis that the structure of the gamble (conjunctive, simple, disjunctive) affected the subjective probability of by: 9. BLP does indeed generate different reports of subjective probabilities on a between-subjects basis, even though the subjects otherwise faced the same scoring rule and saw the same physical stimuli generating subjective probabilities. We extend this evaluation of the BLP to the elicitation of subjective belief distributions over continuous.   Using a matching task (in which participants directly provide a subjective value), the authors reported that the subjective values in the direct evaluation of delayed lotteries Author: Wojciech Białaszek, Przemysław Marcowski. The reduction of compound lotteries axiom (ROCL) has assumed a central role in the evaluation of behavior towards risk and uncertainty. We present experimental evidence on its validity in the.

This is not a lottery strategy book, because an optimum strategy does not exist. Only the choice of the lottery matrices and the combinations to play exist. What does exist, however, is a collection of numerical probabilities and mathematical parameters specific to each lottery matrix, and those are generated by the mathematical. Subjective Probability and Expected Utility, A Stochastic Approximation Evaluation Article (PDF Available) in Indian Journal of Applied Research 4(3) March with Reads.   The range of problems to which the classical probabilists applied their theory shows that their understanding of probability embraced objective as well as subjective elements: statistical actuarial probabilities happily co-existed with epistemic probabilities of testimony in the work of . mixed in a given proportion with a third lottery. This axiom is responsible for the specific, expectional form of the function u(x) provided by the VNM theorem. A few constructions also involve a compound lottery axiom, which says in effect that any lottery having further lotteries as its outcomes can be reduced to a one-stage lottery.

The subjective probabilities play a role analogous to that of objec- tive probability under objective uncertainty, thereby reducing the problem of decision making under uncertainty to decision making under risk, and permitting risk attitudes to be quantified by a utility function. the decision maker compares two lottery-like games, each of which can result in a Prize (A or B). Prize A or Prize B CHAPTER 8. SUBJECTIVE PROBABILITY Slide No. 25 Methods for Assessing Discrete ENCE ©Assakkaf Probabilities Method #3 (cont’d) −2nd lottery is called the “reference lottery.   In this case there is a striking difference in the theoretical predictions of using the BLP, compared to the case of subjective probabilities for a binary event: there is no significant effect of “plausible” levels of risk aversion on optimal reports compared to true latent subjective belief distributions. The qualitative effect of greater. and subjective probabilities that best explain observed choices in the belief elicitation task as well as observed choices in the lottery tasks In sessions 1 and 4 the estimated subjective probabilities were, respectively, equal to % with a p-value of and % with p-value less than Each of these estimates is statistically.