Cognitive Foundations of Probability
Prediction is based on past cases. We assume that a predictor can rank eventualities according to their plausibility given any memory that consists of repetitions of past cases. In a companion paper, we show that under mild consistency requirements, these rankings can be represented by numerical functions, such that the function corresponding to each eventuality is linear in the number of case repetitions. In this paper we extend the analysis to rankings of events. Our main result is that a cancellation condition a la de Finetti implies that these functions are additive with respect to union of disjoint sets. If the set of past cases coincides with the set of possible eventualities, natural conditions are equivalent to ranking events by their empirical frequencies. More generally, our results may describe how individuals form probabilistic beliefs given cases that are only partially pertinent to the prediction problem at hand, and how this subjective measure of pertinence can be derived from likelihood rankings.
|Date of creation:||Dec 2001|
|Date of revision:|
|Publication status:||Published in Mathematics of Operations Research (2002), 27: 68-81|
|Contact details of provider:|| Postal: |
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.econ.yale.edu/
More information through EDIRC
|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:1340. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Glena Ames)
If references are entirely missing, you can add them using this form.