Title

Probabilities as Similarity-Weighted Frequencies

Document Type

Discussion Paper

Publication Date

11-1-2004

CFDP Number

1492

CFDP Pages

20

Abstract

A decision maker is asked to express her beliefs by assigning probabilities to certain possible states. We focus on the relationship between her database and her beliefs. We show that, if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the belief formation process follows a simple formula: beliefs are a similarity-weighted average of the beliefs induced by each past case.

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