I noticed that when finding the posterior probabilities of a single parameter Pareto whose theta parameter varies by insured uniformly, the upper bound of theta is the least of its provided upper bound and the lowest historical claim amount. (because theta<x, by definition).
I then noticed that when you're asked to find the Buhlmann credibility of the same problem that the bounds of theta are not restricted by the provided claim amounts. I've accepted this fact. I wonder if someone would help shed some light on why this is the case, and hopefully help me learn a little more about the difference between these two important methods (Buhlmann and Bayesian Credibility)
I then noticed that when you're asked to find the Buhlmann credibility of the same problem that the bounds of theta are not restricted by the provided claim amounts. I've accepted this fact. I wonder if someone would help shed some light on why this is the case, and hopefully help me learn a little more about the difference between these two important methods (Buhlmann and Bayesian Credibility)
Credibility: Bounds on Single-Parameter Pareto
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