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The Bayes mind: From the St Petersburg paradox to the New York Stock Exchange

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Figure

Table 1: Relative frequencies of heads and tails, and their changes on the
Figure 1: Relative frequency of heads and its change on the previous toss
Table 2:Probability of a given relative frequency vs. the number of tosses
Figure 2: Probability of a given relative frequency vs. the number of tosses
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More on the notion o f propensity, and its role in both Popper’s and, implicitly, Von Mises’ theories, It was Popper’s own belief that epistemic decisions should rest solely on the truth or truth-likeness of a hypothesis Although his and subsequent attempts to formalise the notion o f truth-likeness, or The extra complication represented by the term c is due to the fact that there is no reason to postulate zero utility in the case of a lost bet, since the utility of an outcome of a gamble is no longer Often such changes of mind result from discussing the matter with others It is not uncommon for one juror to talk the others into changing their opinion from 'innocent' to 'guilty1, or vice versa, after all While Donald Gillies modestly denies his confirmation function being ‘all-embracing’, and indeed There is a further objection to the latter option, namely that the betting situation itself may influence In a footnote, Forster and Sober add that if the law of planetary motion itself included a stochastic These are the hypotheses that the true curve is a parabola or a straight line, respectively MM. MARKET BEHAVIOUR 1 33 from the point of view of capital markets and the underlying economic performance As

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