General correcting formulae for forecasts
MPRA Paper from University Library of Munich, Germany
The concept of unforeseen events is considered as a part of a hypothesis of uncertain future. The applications of the consequences of the hypothesis in utility and prospect theories are reviewed. Partially unforeseen events and their role in forecasting are analyzed. Preliminary preparations are shown to be able, under specified conditions, to quicken the revisions of forecasts and to hedge or diversify financial risks after partially unforeseen events have occurred. General correcting formulae for forecasts are proposed.
Keywords: forecast; uncertainty; risk; utility; decisions; Ellsberg paradox (search for similar items in EconPapers)
JEL-codes: C53 D8 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-for and nep-upt
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