Back of the Envelope

Observations on the Theory and Empirics of Mathematical Finance

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Probabilities as we use them

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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)

Written by Vineet

October 26, 2010 at 6:00 pm

Posted in Probability

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