Document Type
Article
Publication Date
8-2025
Journal Title
Theory & Decision
ISSN
0040-5833
DOI
10.1007/s11238-025-10083-7
Abstract
Decision makers attempting to classify a binary state of the world may commit two types of errors. Even when the two alternative states have equal prior probabilities and when the two types of errors are equally costly, a classification criterion may be chosen which leads to one type of error being committed more frequently than the other, because of asymmetries in the data that informs their decisions. We formalize this possibility through a categorization of data-generating processes (DGPs), which may be ‘oriented’ towards evidence favoring one of the two alternatives, or which may be ‘unoriented’. We identify the shape properties of the receiver operating characteristic (ROC) curves associated with DGPs in these three categories. We also identify the orientation of DGPs obtained from common distribution families. Then, we illustrate the usefulness of our categorization with several applications, e.g., the standard decision making problem, ranking intersecting ROC curves for particular classes of decision makers, interpreting Bayesian persuasion strategies, and burden of proof assignments in simple litigation settings.
Num Pages
37
Publisher
Springer
Rights
Open Access This article is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License, which permits any non-commercial use, sharing, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if you modified the licensed material. You do not have permission under this licence to share adapted material derived from this article or parts of it. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/4.0/.
Notes
This article was published online prior to official volume, issue number, and pagination being determined.
Recommended Citation
Claude Fluet & Murat C. Mungan,
Oriented data-generating processes: a categorization of ROC curves,
Theory & Decision
(2025).
Available at:
https://scholarship.law.tamu.edu/facscholar/2332
File Type
Included in
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