Back of the Envelope

Observations on the Theory and Empirics of Mathematical Finance

Probabilities as we use them

leave a comment »

This is John Allen Paulos on probabilities:

…for applications of probability and statistics, which are what most people mean when they refer to them, the appropriate logic is informal and intensional. The reason is that an event’s probability, or rather our judgment of its probability, is almost always affected by its intensional context.

Another reason why Bayesian interpretations of probability makes more sense in finance. (Also see Prof. Varma’s Bayesians in Finance post last year)

Advertisements

Written by Vineet

October 26, 2010 at 6:00 pm

Posted in Probability

Tagged with ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: