Calibration, Expected Utility and Local Optimality
We propose a framework for reconciling frequentist and subjectivist views of probability. In an environment with repeated trails we show that beliefs about the possible states of nature can be represented by probabilities. Second, these probabilities will correspond to long run frequencies. In particular they will be naively calibrated. Third, the actions chosen in each trial will be the ones that maximize expected utility on that trial. The expectation is with respect to the probabilities used to represent beliefs.
|Date of creation:||Mar 1999|
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- Kalai, Ehud, 1989. "Games and economic behavior," Games and Economic Behavior, Elsevier, vol. 1(1), pages 1-4, March.
- Ehud Kalai & Ehud Lehrer & Rann Smorodinsky, 2010.
"Calibrated Forecasting and Merging,"
Levine's Working Paper Archive
584, David K. Levine.
- Ehud Kalai, 1995. "Calibrated Forecasting and Merging," Discussion Papers 1144R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Ehud Kalai, 1995. "Calibrated Forecasting and Merging," Discussion Papers 1144, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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