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Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
In expected utility theory, a lottery is a discrete distribution of probability on a set of states of nature.The elements of a lottery correspond to the probabilities that each of the states of nature will occur, (e.g. Rain: 0.70, No Rain: 0.30). [1]
In decision theory, a decision rule is a function which maps an observation to an appropriate action. Decision rules play an important role in the theory of statistics and economics , and are closely related to the concept of a strategy in game theory .
Also confidence coefficient. A number indicating the probability that the confidence interval (range) captures the true population mean. For example, a confidence interval with a 95% confidence level has a 95% chance of capturing the population mean. Technically, this means that, if the experiment were repeated many times, 95% of the CIs computed at this level would contain the true population ...
This rule allows one to express a joint probability in terms of only conditional probabilities. [4] The rule is notably used in the context of discrete stochastic processes and in applications, e.g. the study of Bayesian networks, which describe a probability distribution in terms of conditional probabilities.
The mythological Judgement of Paris required selecting from three incomparable alternatives (the goddesses shown).. Decision theory or the theory of rational choice is a branch of probability, economics, and analytic philosophy that uses the tools of expected utility and probability to model how individuals would behave rationally under uncertainty.
The National Bureau of Economic Research says a recession involves a "significant decline in economic activity that is spread across the economy and lasts more than a few months."
The theory of subjective expected utility combines two concepts: first, a personal utility function, and second, a personal probability distribution (usually based on Bayesian probability theory). This theoretical model has been known for its clear and elegant structure and is considered by some researchers to be "the most brilliant axiomatic ...