In this talk we introduce a new notion that we term the "Hazard Potential". The notion shares some parallel with the notion of potential energy in physics. The notion enables to explain the failure process and dependence among lifetimes. More important, it provides a robust approach for generating probability models of survival by looking at the hitting times of stochastic processes to a random threshold. Special cases of the Levy processes, such as the compound Poisson, the gamma, and the stable can be considered under a common umbrella, as well as other processes such as the Markov, the maxima of a geometric Brownian motion, and a process which is de facto deterministic. For many of these closed form results are available giving us a new class of survival models to consider.
The Hazard Potential: An Approach for Specifying Models of Survival
Nozer D. Singpurwalla
The George Washington University