# Economics of Disagreement—Financial Intuition for the Rényi Divergence

@article{Soklakov2018EconomicsOD, title={Economics of Disagreement—Financial Intuition for the R{\'e}nyi Divergence}, author={Andrei N. Soklakov}, journal={Entropy}, year={2018}, volume={22} }

Disagreement is an essential element of science and life in general. The language of probabilities and statistics is often used to describe disagreements quantitatively. In practice, however, we want much more than that. We want disagreements to be resolved. This leaves us with a substantial knowledge gap, which is often perceived as a lack of practical intuition regarding probabilistic and statistical concepts. Here, we propose to address disagreements using the methods of financial economics…

## 7 Citations

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For gambling on horses, a one-parameter family of utility functions is proposed, which contains Kelly’s logarithmic criterion and the expected-return criterion as special cases and the connection to the Rényi divergence is shown.

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