| Sumario: | This article analyzes the risk factors that surround assets in commerce in the U.S. The risk is shared by three agents: the seller of the asset; the buyer; and an insurer. Assume that the buyer knows with certainty the form of the failure distribution but not the parameters. The seller and the insurer still know the complete distribution with certainty. Assume that the true failure distribution is exponential with intensity parameter, so the probability density functions. The buyer is then presumed to know that the form of the distribution is exponential, but he does not know the value. Instead, the buyer's beliefs about the true value can be expressed as a probability distribution about the true value with density.
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