A new approach for imprecise probabilities
Abstract
This paper introduces a novel concept of interval probability measures that enables the representation of imprecise probabilities, or uncertainty, in a natural and coherent manner. Within an algebra of sets, we introduce a notion of weak complementation denoted as . The interval probability measure of an event is defined with respect to the set of indecisive eventualities , which is included in the standard complement . We characterize a broad class of interval probability measures and define their properties. Additionally, we establish an updating rule with respect to , incorporating concepts of statistical independence and dependence. The interval distribution of a random variable is formulated, and a corresponding definition of stochastic dominance between two random variables is introduced. As a byproduct, a formal solution to the century-old Keynes-Ramsey controversy is presented.
Cite
@article{arxiv.2402.02556,
title = {A new approach for imprecise probabilities},
author = {Marcello Basili and Luca Pratelli},
journal= {arXiv preprint arXiv:2402.02556},
year = {2024}
}