Certainty

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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Certainty

 

a term used in probability theory, logic, epistemology, and law (theory of legal proof). In philosophical and logical-methodological investigations it is most frequently used to characterize knowledge that is valid, conclusive, or indisputable and also as a synonym for truth. In experimental natural science the term “certainty” frequently designates events and judgments that are regarded as empirically confirmed by special experiments or, more broadly, by the social and productive practice of men.

The term acquires a somewhat specialized meaning in probability theory. In so-called subjective, or personal, probability, certainty is most frequently interpreted as a concept reflecting the subject’s confidence in the correctness of his evaluation of the probability that a particular event will occur. From this point of view certainty also expresses the extent of a given individual’s knowledge about the conditions and factors contributing to or counteracting the occurrence of events. In this sense, with the exception of extremely idealized or oversimplified cases, certainty includes a considerable element of uncertainty, inasmuch as exhaustive knowledge about such conditions and factors is practically unobtainable.

A. I. RAKITOV

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
These outcomes get overweighted and generate a higher certainty equivalent return.
It can be seen that the Certainty Equivalent appears to reach its asymptotic value just after the Expected Utility achieves its maximum level.
To test necessity, we regress Task-9 PR-equivalents on gender, Task-8 outcome, Task-7 to -8 improvement in outcome, Task-8 self-rank, the lottery certainty equivalent, and a task-order dummy.
It is possible to use the idea of certainty equivalents to evaluate how much individuals would be willing to pay to exchange the type of annuities described in figures 2 and 3 with otherwise similar annuities that shielded them from uncertainty concerning the future evolution of the mortality rates of their respective birth cohorts.
Then, we need to solve the corresponding stochastic control problems to find and compare the maximum terminal certainty equivalent (CE) which can be achieved under both charge schemes.
The certainty equivalent in equation (11) is used to formulate the participation and incentive constraints.
Thus, under the case in which insurance firms do not have demand information, the equilibrium certainty equivalent, which is denoted by [CE.sup.0*.sub.i], is
The certainty equivalent of the optimized portfolio is very high when compared to the value and equal weighted portfolios, the first is 24% in sample and 18% out of sample and the last two are -0.2% and 0.1%.
Investors exercise when the current NAV exceeds the certainty equivalent of holding the hedge fund.
The absence of uncertainty means that actual, expected and certainty equivalent rates of return are all the same.
TABLE 1 CERTAINTY EQUIVALENT WEALTH AT AGE 65, BY PORTFOLIO ALLOCATION RULES (in 1,000's of year 2000 dollars) Portfolio Allocation HS or Less College or More Risk Neutral 100% Riskless Index Bonds 199 265 50% Bonds, 50% Stocks 401 509 100% Stocks 852 1042 "Moderate" Risk Aversion 100% Riskless Index Bonds 199 265 50% Bonds, 50% Stocks 969 469 100% Stocks 523 686 Note: Assuming median value of SSW + DB Wealth Source: Poterba, Rauh, Venti and Wise (2005).