What is ‘Objective Probability’
The probability that an event will occur based an analysis in which each measure is based on a recorded observation, rather than a subjective estimate. Objective probabilities are a more accurate way to determine probabilities than observations based on subjective measures, such as personal estimates.
Explaining ‘Objective Probability’
For example, one could determine the objective probability that a coin will land “heads” up by flipping it 100 times and recording each observation. When performing any statistical analysis, it is important for each observation to be an independent event that has not been subject to manipulation. The less biased each observation is, the less biased the end probability will be.
Objective Probability FAQ
What is a subjective probability?
What are the 3 types of probability?
What is an example of empirical probability?
How do you define probability?
How is probability used in economics?
What is subjective and objective probability?
- Cultural capital: objective probability and the cultural arbitrary – www.tandfonline.com [PDF]
- Probability and uncertainty in economic modeling – www.aeaweb.org [PDF]
- Cortisol shifts financial risk preferences – www.pnas.org [PDF]
- Asset allocation and annuity‐purchase strategies to minimize the probability of financial ruin – onlinelibrary.wiley.com [PDF]
- Subjective probabilities in household surveys – www.annualreviews.org [PDF]
- Subjective probability in behavioral economics and finance: A radical reformulation – www.tandfonline.com [PDF]
- A universal framework for pricing financial and insurance risks – www.cambridge.org [PDF]