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The IUP Journal of Applied Economics
Movie Rankings and Greatest Accuracy Credibility Theory: An Alternate Modeling Approach
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Greatest accuracy credibility theory is a model-based approach to the solution of the underlying credibility problem. The present study is undertaken to apply greatest accuracy credibility theory or Bühlmann modeling in movie ranking problem. Contrary to the popular and recent study of the application of Bayesian credibility theory in rating and ranking movies, the present paper provides an alternate modelbased approach to the movie ranking problem by introducing Bühlmann modeling and eventually concluding that the credibility factor obtained using the Bühlmann modeling approach is exactly of the same form as obtained in the earlier studies using the Bayesian credibility theory approach. This will consequently strengthen the claim of the previous studies that the credibility theory approach to rating and ranking movies is statistically robust and intuitively sound. Hence, the effectiveness of this diverse application of any form of credibility theory in such an unlikely domain with the aim to achieve more accurate movie rankings will be further established through the present study. Further extension is provided by introducing and presenting Bühlmann-Straub modeling to the same problem in a more realistic scenario.

 
 
 

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.

 
 
 

Movie Rankings, Greatest Accuracy Credibility, An Alternate Modeling Approach