Aggregating Point Estimates: A Flexible Modeling Approach

Robert T. Clemen and Robert L. Winkler
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Robert T. Clemen: College of Business Administration, University of Oregon, Eugene, Oregon 97403
Robert L. Winkler: Fuqua School of Business, Duke University, Durham, North Carolina 27706

Management Science, 1993, vol. 39, issue 4, 501-515

Abstract: In many decision situations information is available from a number of different sources. Aggregating the diverse bits of information is an important aspect of the decision-making process but entails special statistical modeling problems in characterizing the information. Prior research in this area has relied primarily on the use of historical data as a basis for modeling the information sources. We develop a Bayesian framework that a decision maker can use to encode subjective knowledge about the information sources in order to aggregate point estimates of an unknown quantity of interest. This framework features a highly flexible environment for modeling the probabilistic nature and interrelationships of the information sources and requires straightforward and intuitive subjective judgments using proven decision-analysis assessment techniques. Analysis of the constructed model produces a posterior distribution for the quantity of interest. An example based on health risks due to ozone exposure demonstrates the technique.

Keywords: aggregation; combining; consensus; influence diagrams; linear models; subjective assessment; risk assessment (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:39:y:1993:i:4:p:501-515

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