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The sequential sawyer – a tale of frequentist fright

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Author Info
Michael R. Powers

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Abstract

Purpose – The editorial aims to illustrate a major weakness of frequentist estimation – overlooking prior beliefs that are clearly relevant. Design/methodology/approach – A hypothetical forecasting problem is considered in which a law-enforcement officer has to determine who will be the next victim in a coded sequence constructed by a serial killer. The frequentist method of maximum likelihood is used to select the underlying pattern. Findings – The example shows that it is quite possible for the maximum-likelihood approach to overlook an intuitively obvious model. Originality/value – The editorial provides a simple and clear example of the shortcomings of the maximum-likelihood principle.

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Publisher Info
Article provided by Emerald Group Publishing in its journal Journal of Risk Finance.

Volume (Year): 9 (2008)
Issue (Month): 4 (August)
Pages: 313-316
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Handle: RePEc:eme:jrfpps:v:9:y:2008:i:4:p:313-316

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Related research
Keywords: Forecasting statistics; Statistics;

Statistics
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This page was last updated on 2009-12-13.


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