What Is Subjective Probability?

Subjective probability refers to the probability determined based on past experience and judgment, based on predictions of future developments and research on historical statistics. It reflects only a subjective possibility. Although it is scientific, it is different from the natural probability that can objectively reflect the development law of things. The scientific nature of natural probability has been confirmed by several past statistical results, and subjective probability can only reflect the approximate possibility of future events. ^[1]

Subjective probability

Subjective Probability and Prior Distribution

Subjective probability has statistics

In order to obtain the data of the observed values i i = 1, ..., n, then:

Delineate prior distribution by histogram

Select the possible function form as the prior distribution, and then determine the parameters

Find the frequency (discrete RV)

When subjective probability state cannot be observed directly

If the direct observation is only relevant (usually this is the case), it is difficult to obtain the prior information from it: The distribution of is determined by the edge distribution m (.):

m (x) = or m (x) =

The joint density of X and is h (x, ) = f (x | ) ()

It is not difficult to estimate m (x), but even if f (x | ) is known, (