The Consensus of Subjective Probability Distributions

“‘But we can't agree whether A or B is correct,' he concluded, ‘and so we're collecting expert opinions, weighting them appropriately, and programming WESCAC to arbitrate the whole question.’” (John Barth, Giles Goat-Boy, p. 664.) In the Bayesian framework, quantified judgments about uncertainty are an indispensable input to methods of statistical inference and decision. If a decision maker has little knowledge with regard to the parameters of interest, he may decide to consult a number of experts and obtain their quantified judgments in the form of subjective probability distributions. If this is the case, the decision maker must somehow combine the distributions assessed by the experts and form a single distribution to be used as an input to a formal Bayesian analysis. Several methods for combining the distributions are suggested, some involving mathematical formulae and some involving feedback and/or group discussion. These methods are compared under certain assumptions regarding the form of the distributions and also under experimental conditions.

Duke Scholars

Author Robert L. Winkler Fuqua School of Business