Probability Approach

The probability approach for generating the commensurate criterion maps isa based on probability theory King 1969, Thomas and Huggett 1980). The theory has developed from formal consideration of random phenomena, that is, form the study of phenomena that on any single observation may result in any one of a number of possible outcomes. The particular outcome of a single observation is dependent on chance and cannot be predicted precisely ahead of time. It is understood, however that over repeated observations the outcomes will show some statistical regularity in the sense that a number between 0 and 1 can be used to represent the relative frequencies with which the different possible outcomes occur. Zero indicates that it is impossible for an event to occur, and one indicates that the event is certain to occur. A decision maker could assess the likelihood of some event occurring in different ways, for example, with objective probability or with subjective probability. Objective probability requires that there be some basis for assessing the likelihood of occurrence that should be independent of the person performing the assessment, indicating the relative frequency with which a specific outcome has been observed to occur in the long run. Subjective probability is an expression of the degree of belief in an event occurring. It is a subjective perception of the likelihood of an event occurring. The assessment of the likelihood of an event depends not only on the specific experiences of the person who is involved, but also on his or her nature. The person will weigh the evidence as he or she sees it and then expresses its probability as a degree of belief. Personal experience, judgment, and intuition will influence the assessment of the degree of uncertainly, but this is not undesirable in the absence of objective, quantifiable data.

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References

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