Sequential Estimation of p with Squared Relative Error Loss.

Abstract:

:We consider the sequential estimation of p, the probability of success in an infinite sequence of Bernoulli trials, when the loss incurred in stopping after n trials and estimating p by some function delta(n) of the first n outcomes is taken to be [Formula: see text] The loss due to error of estimation is thus the symmetrized relative squared error, which is appropriate in applications when p may be near 0 or 1.We begin by finding a heuristic procedure for sequentially determining the sample size n which, with the usual terminal estimator of p, performs well for any fixed 0 < p < 1 as the cost per observation c --> 0. For any fixed c > 0, however, this procedure is poor as p --> 0 or 1. To remedy this defect, the uniform prior on p is introduced. The corresponding Bayes procedure is found and is shown to have a Bayes risk approximately 2pi radicalc as c --> 0.

authors

Cabilio P,Robbins H

doi

10.1073/pnas.72.1.191

subject

Has Abstract

pub_date

1975-01-01 00:00:00

pages

191-3

issue

1

eissn

0027-8424

issn

1091-6490

journal_volume

72

pub_type

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