PROBABILITY THEORY AND ITS ROLE IN ECONOMICS
Keywords:
probability theory, economic modeling, risk, risk management, forecasting, financial markets, investment, statistical analysis, uncertainty, decision-making.Abstract
This article analyzes the theoretical foundations of probability theory and its practical significance in modern economics. The research reveals the role of the probabilistic approach in decision-making under conditions of uncertainty and risk. In particular, the effectiveness of using probability theory in the modeling of financial markets, evaluation of investment projects, the operation of insurance systems, and risk management processes is substantiated. The results of the study show that probability theory provides scientific basis for economic decision-making, serves to rationally use resources and minimize the level of risk.
References
Andrey Kolmogorov. (1950). Foundations of the Theory of Probability. New York: Chelsea Publishing Company.
John von Neumann, & Oskar Morgenstern. (1944). Theory of Games and Economic Behavior. Princeton: Princeton University Press.
Harry Markowitz. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77–91.
David R. Cox, & David V. Hinkley. (1974). Theoretical Statistics. London: Chapman and Hall.
George Casella, & Roger L. Berger. (2002). Statistical Inference (2nd ed.). Pacific Grove: Duxbury Press.
William H. Greene. (2018). Econometric Analysis (8th ed.). New York: Pearson.
Sheldon M. Ross. (2014). Introduction to Probability Models (11th ed.). Amsterdam: Academic Press.
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