An Experiment in Probability Estimation

Abstract

While the activity of marketing research can be fruitfully viewed within a statistical decision theoretic model, relatively little is known concerning the descriptive aspects of how people—managers or consumers—revise probabilities in the light of new information. This paper reports the results of a behavioral study in probability revision, and the implications of these findings for the operational use of decision theoretic concepts in prescriptive and descriptive choice-making models.