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On second order probabilities and the notion of epistemic risk

Sahlin, Nils-Eric LU (1983) In Foundations of Utility and Risk Theory with Applications 37. p.95-104
Abstract
Second or higher order probabilities have commonly been viewed with scepticism by those working within the realm of probability and decision theory. The aim of the present note is to show how the notion of second order probabilities can add to our understanding of judgmental and decision processes and how the traditional framework of Bayesian decision theory can be extended in a fruitful way by taking such entities into account. Section one consists of a brief account of arguments put forth against higher order probabilities as well as of counterarguments. In order to provide an example of the applicability of second order probabilities a decision theory encompassing such probabilities will be presented in section two. In section three I... (More)
Second or higher order probabilities have commonly been viewed with scepticism by those working within the realm of probability and decision theory. The aim of the present note is to show how the notion of second order probabilities can add to our understanding of judgmental and decision processes and how the traditional framework of Bayesian decision theory can be extended in a fruitful way by taking such entities into account. Section one consists of a brief account of arguments put forth against higher order probabilities as well as of counterarguments. In order to provide an example of the applicability of second order probabilities a decision theory encompassing such probabilities will be presented in section two. In section three I will try to emphasize the value of second order probabilities for a deeper and more complete understanding of the notion of risk. (Less)
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author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
in
Foundations of Utility and Risk Theory with Applications
editor
Stigum, B.P.; Wenstøp, F.; Reidel, D.; ; and
volume
37
pages
95 - 104
publisher
Springer
ISSN
0921-3376
ISBN
978-90-481-8364-7
DOI
10.1007/978-94-017-1590-4_6
language
English
LU publication?
yes
id
b548ae10-e8f9-4e42-b80b-169643793d7c (old id 7752964)
date added to LUP
2015-08-10 13:11:34
date last changed
2016-04-16 03:03:53
@inbook{b548ae10-e8f9-4e42-b80b-169643793d7c,
  abstract     = {Second or higher order probabilities have commonly been viewed with scepticism by those working within the realm of probability and decision theory. The aim of the present note is to show how the notion of second order probabilities can add to our understanding of judgmental and decision processes and how the traditional framework of Bayesian decision theory can be extended in a fruitful way by taking such entities into account. Section one consists of a brief account of arguments put forth against higher order probabilities as well as of counterarguments. In order to provide an example of the applicability of second order probabilities a decision theory encompassing such probabilities will be presented in section two. In section three I will try to emphasize the value of second order probabilities for a deeper and more complete understanding of the notion of risk.},
  author       = {Sahlin, Nils-Eric},
  editor       = {Stigum, B.P. and Wenstøp, F. and Reidel, D.},
  isbn         = {978-90-481-8364-7},
  issn         = {0921-3376},
  language     = {eng},
  pages        = {95--104},
  publisher    = {Springer},
  series       = {Foundations of Utility and Risk Theory with Applications},
  title        = {On second order probabilities and the notion of epistemic risk},
  url          = {http://dx.doi.org/10.1007/978-94-017-1590-4_6},
  volume       = {37},
  year         = {1983},
}