H.J. Jeffrey and A.O. Putman / Published 2015 / Article
Citation: Jeffrey, H.J. & Putman, A.O. (2015). “Subjective Probability in Behavioral Economics and Finance: A Radical Reformulation,” The Journal of Behavioral Finance, 16(3), 231-249.This paper presents a radical re-formulation of subjective probability, showing that what have been called “subjective probabilities” are properly formulated as uncertainty appraisals, re-descriptions of states of affairs carrying tautological implications for action. A novel formulation of the decision maker's field-of-view, based on the concept of Actor, Observer, and Critic roles, combined with the uncertainty appraisal formulation, is used to develop new methods for evaluating data, finding patterns in data, and integrating probabilities and uncertainty appraisals, that is, those aspects that have, until now, been called “subjective probabilities.”