Movie Rankings and Greatest Accuracy Credibility Theory: An Alternate Modeling Approach

By Das, Palash Ranjan; Chakrabarti, Tripti | IUP Journal of Applied Economics, April 2017 | Go to article overview

Movie Rankings and Greatest Accuracy Credibility Theory: An Alternate Modeling Approach


Das, Palash Ranjan, Chakrabarti, Tripti, IUP Journal of Applied Economics


(ProQuest: ... denotes formulae omitted.)

Introduction

Credibility theory is basically a set of quantitative tools, policies and procedures which allows an insurer to adjust future premiums based on past experience on a particular risk or group of risks. Credibility theory ultimately relies on the combination of experience estimates from historical data as well as base estimates in order to develop formulas. The formulas are used to replicate past experiences, and are then tested against actual data.

Credibility theory has been used over a considerable period of time in one form or another mainly in different areas of the insurance industry. Areas such as property, casualty accident and health have benefitted from using credibility theory because claims occur at a relatively high rate and the pricing horizon is relatively short. This provides sufficient recent experience to use for future expectations.

There are three basic approaches to credibility theory: classical credibility (also known as limited fluctuation credibility), Bühlmann credibility (also known as greatest accuracy credibility) and Bayesian credibility. Of these, Bühlmann credibility has a statistical modelbased approach and is more theoretically sound and robust. Due to these advantages of Bühlmann credibility over other approaches, we will apply it to the movie ranking problem in this study contrary to the previous studies of Das and Chakrabarti (2016) that had approached the same problem by applying the principles of Bayesian credibility theory.

Greatest accuracy credibility or Bühlmann credibility attempts to produce linear estimates which will minimize the estimate and the quantity being estimated. Instead of concentrating on the stability of the experience, this theory focuses on the homogeneity of the estimate within the portfolio. However, it is assumed in this model that past experiences are independent and identically distributed components with respect to each year. Although this assumption makes the model simple, it is impractical as it does not allow for variations in exposure or size. These variations are dealt with in the Bühlmann-Straub model.

Traditionally any form of the theory of credibility was applied by actuaries and insurers as a method to calculate the future risk premium by combining the individual risk experience with the class risk experience. Hence, its application was confined to a large extent in the insurance industry domain only. However, recent researches have justified the fact that the application of the theory can be diversified and extended to other unlikely domain as well. One such diverse and interesting application is its usage in ranking movies. The primary aim is to apply credibility theory to achieve more accurate and reliable movie rankings based on user's votes. The goal is to eventually help investors to reduce uncertainty about their decision to finance (or not) a new motion picture. Since user's votes comprise a dynamic subset of the whole population of movie goers, the movie rating problem focuses on the homogeneity of the voting group. Hence the appropriateness of the application of greatest accuracy credibility theory in movie ranking problem is ascertained. Further, in our study, we will justify the statistical robustness of credibility theory as an efficient method to rank movies as claimed in the previous studies concerning the same topic.

The paper is organized as follows: a review of the related literature on greatest accuracy credibility theory is followed by justification of the present study and objectives. Subsequently we will apply Bühlmann modeling and Bühlmann-Straub modeling to movie ranking problem. Numerical calculations are followed by interpretation of the same to justify the suitability and effectiveness of Bühlmann-Straub modeling over Bühlmann modeling to achieve more accurate movie rankings. Finally, the conclusion is presented along with the scope for further research. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Movie Rankings and Greatest Accuracy Credibility Theory: An Alternate Modeling Approach
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.