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PROCEDURES TO INCREASE THE VALIDITY OF SUBJECTIVE PROBABILITY ESTIMATES
Author(s) -
Berhold Marvin
Publication year - 1975
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1975.tb01056.x
Subject(s) - statistics , representation (politics) , confidence interval , econometrics , sensitivity (control systems) , mathematics , least squares function approximation , estimation , decision maker , coverage probability , normal distribution , computer science , operations research , management , electronic engineering , estimator , politics , political science , law , economics , engineering
A decision making model is often very sensitive to the subjective probability estimates that are used. To reduce this sensitivity, it is necessary to utilize elicitation procedures that yield more valid estimates and increase the decision maker's confidence in the estimates. This paper discusses an experiment in which the subjects were asked to estimate the areas of various squares. Two procedures were evaluated. In one procedure, the subjects were told that estimates were distributed typically around the true value in accordance with the normal probability distribution. In the other, the subjects were asked to estimate the length as a component that could be used to calculate the area. The results indicate that the normal error model is a reasonable representation of the estimation procedure. Both procedures provided estimates with significant validity. There is also an indication that the procedures reduce bias and that both procedures result in more consistent estimates when the sizes of the squares are varied.