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A time-invariant version of Laplace’s rule

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We discuss estimating event probabilities with past data, addressing issues with Laplace’s rule and proposing a modification to improve accuracy.

What is the probability that the sun will rise tomorrow? What are the chances of a pandemic happening next year? What are the odds of survival of a new surgery that has been successfully executed only once? These and many other questions can be answered appealing to a general rule: Laplace’s rule of succession. This rule describes the probability of a positive outcome given information about past successes. The versatility and generality of the rule makes it an invaluable tool to forecasters, who use it to estimate base rates1. Laplace’s rule can be stated in simple terms. If we have…

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