Abstract The article reports that decision making under uncertainty is receiving increasing emphasis in business and economic academic programs. The concept of expected value, for example, is emphasized in many statistics, economics, and operations research courses. Unfortunately, the techniques of maximizing and minimizing expected values are generally taught without appropriate attention being given to the formulation of the subjective probabilities. Without such experience, individuals may be hesitant or lack proficiency in specifying personal probability distributions. Several types of classroom exercises have been devised to emphasize the elicitation of personal probabilities. The formation of personal, subjective probabilities can also be emphasized in course examinations through the use of a technique one calls Probabilistically Answered Examinations (PAE). In PAE, students are encourage to quantify their beliefs honestly concerning the correctness of alternative answers. For example, multiple choice and true-false PAE questions require that students place probabilities in the form of percentages on each answer. This article also explains scoring rules for PAE, presents an acceptable PAE grading technique, and reports the results of adopting PAE in an undergraduate auditing class.
Glein et al. (Mon,) studied this question.