The Reliability of Subjective Probabilities Obtained Through Decomposition

H. V. Ravinder, Don N. Kleinmuntz and James S. Dyer
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H. V. Ravinder: Anderson School of Management, University of New Mexico, Albuquerque, New Mexico 87131
Don N. Kleinmuntz: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
James S. Dyer: Department of Management, University of Texas at Austin, Austin, Texas 78712

Management Science, 1988, vol. 34, issue 2, 186-199

Abstract: The use of decomposition as a procedure for improving the consistency of subjective probability encoding is discussed. Using a psychometric measurement model, an expression is developed that describes the random error associated with decomposition estimates as a function of characteristics of the component assessments. Decomposition is compared to direct assessment in terms of the percent change in measurement error that can be attributed to the use of decomposition. Potential benefits of decomposition are specified and recommendations made on how to utilize decomposition as an approach for error control.

Keywords: decision analysis; decomposition; subjective probability assessment (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:34:y:1988:i:2:p:186-199

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