Assessing Probabilities of Unique Events: A New Approach

Abstract

Decision-makers in unique or one-off situations may have difficulties in framing the probabilities of possible events that are required in modern decision-making. This paper illustrates a new approach to probability determination based on pairwise primary judgments on the relative likelihoods of the possible events. Related “news” on the situation can also be used to update these prior probabilities using Bayesian Revision. Illustrative calculations outline the entire process through to determination of posterior probabilities following a “news” event.