De Finetti was Right: Probability Does Not Exist |
| |
Authors: | Nau Robert F |
| |
Institution: | (1) Fuqua School of Business, Duke University, Durham, NC 27708-0120, USA |
| |
Abstract: | De Finetti's treatise on the theory of probability begins with the provocative statement PROBABILITY DOES NOT EXIST, meaning
that probability does not exist in an objective sense. Rather, probability exists only subjectively within the minds of individuals.
De Finetti defined subjective probabilities in terms of the rates at which individuals are willing to bet money on events,
even though, in principle, such betting rates could depend on state-dependent marginal utility for money as well as on beliefs.
Most later authors, from Savage onward, have attempted to disentangle beliefs from values by introducing hypothetical bets
whose payoffs are abstract consequences that are assumed to have state-independent utility. In this paper, I argue that de
Finetti was right all along: PROBABILITY, considered as a numerical measure of pure belief uncontaminated by attitudes toward
money, does not exist. Rather, what exist are de Finetti's `previsions', or betting rates for money, otherwise known in the
literature as `risk neutral probabilities'. But the fact that previsions are not measures of pure belief turns out not to
be problematic for statistical inference, decision analysis, or economic modeling.
This revised version was published online in June 2006 with corrections to the Cover Date. |
| |
Keywords: | Probability Beliefs Values Statistical inference Decision theory |
本文献已被 SpringerLink 等数据库收录! |
|