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Applied Mathematics

Probability Theory

What is subjective probability?

As the word implies, a subjective probability is thought of as a personal degree of belief that a particular event will occur. An individual’s personal judgment is not based on any precise computation, but is most often a reasonable assessment of what will happen by a knowledgeable person. This is usually expressed on a scale of 0 to 1, or on the percentage scale. For example, if a person’s baseball team has a winning streak, they might believe that their team has a probability of 0.9 of winning the division championship for the year. More likely, they will say their team has a 90 percent chance of winning, not because of any mathematical formula, but only because the team has had a winning record during the year.



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