The chance of rain, shown on a weather app, is given as a percentage. This is a relative frequency, based on real data. The chance of rain, shown on a weather app, is given as a percentage. This is a ...

Kohlberg, Elon, and Philip J. Reny. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees." Harvard Business School Working Paper, No. 96-072, June 1996.

The sample space diagram shows there are 6 ways of making a 7, out of a total of 36 possible outcomes. Therefore, the probability of rolling two dice and the sum being 7 is \(\frac{6}{36} = \frac{1}{6 ...

Kohlberg, Elon, and Philip J. Reny. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees." Journal of Economic Theory 75, no. 2 (August 1997): 280 – 313.

It is widely accepted that individuals tend to underinsure against low-probability, high-loss events relative to high-probability, low-loss events. This conventional wisdom is based largely on field ...