Inferences with an unknown noise level in a Bernoulli process

Inferences with an unknown noise level in a Bernoulli process

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Article ID: iaor19942035
Country: United States
Volume: 39
Issue: 10
Start Page Number: 1227
End Page Number: 1237
Publication Date: Oct 1993
Journal: Management Science
Authors:
Keywords: stochastic processes
Abstract:

Inferences about a proportion p are often based on data generated from dischotomous processes, which are generally modeled as processes that are Bernoulli in p. In reality, the assumption that a data-generating process is Bernoulli in p is often violated due to the presence of noise. The level of noise is usually unknown and, furthermore, dependent on the unknown proportion in which one is interested. A specific model which takes into account the existence of noise is developed. Any arguments about p based exclusively on a likelihood analysis can lead to difficulties. A Bayesian approach is used, which also helps the paper to formalize a priori dependence between the proportion and the noise level. Empirical data are used to illustrate the model and provide some flavor of the implications of the present uncertainty about the noise for inferences about a proportion.

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