Search results
Results From The WOW.Com Content Network
In expected utility theory, a lottery is a discrete distribution of probability on a set of states of nature. The elements of a lottery correspond to the probabilities that each of the states of nature will occur, (e.g. Rain: 0.70, No Rain: 0.30). [1]
The triangular distribution is therefore often used in business decision making, particularly in simulations. Generally, when not much is known about the distribution of an outcome (say, only its smallest and largest values), it is possible to use the uniform distribution. But if the most likely outcome is also known, then the outcome can be ...
While the concepts of Bayesian statistics are thought to date back to 1763, marketers' exposure to the concepts are relatively recent, dating from 1959. [2] Subsequently, many books [5] [6] [7] and articles [8] [9] have been written about the application of Bayesian statistics to marketing decision-making and market research.
The mythological Judgement of Paris required selecting from three incomparable alternatives (the goddesses shown).. Decision theory or the theory of rational choice is a branch of probability, economics, and analytic philosophy that uses the tools of expected utility and probability to model how individuals would behave rationally under uncertainty.
The St. Petersburg paradox presented by Nicolas Bernoulli illustrates that decision-making based on the expected value of monetary payoffs leads to absurd conclusions. [19] When a probability distribution function has an infinite expected value , a person who only cares about expected values of a gamble would pay an arbitrarily large finite ...
This statistics -related article is a stub. You can help Wikipedia by expanding it.
The models estimate the probability that a person chooses a particular alternative. The models are often used to forecast how people's choices will change under changes in demographics and/or attributes of the alternatives. Discrete choice models specify the probability that an individual chooses an option among a set of alternatives.
A well-chosen WEP gives a decision maker a clear and unambiguous estimate upon which to base a decision. Ineffective WEPs are vague or misleading about the likelihood of an event. An ineffective WEP places the decision maker in the role of the analyst, increasing the likelihood of poor or snap decision making.