Often, I need to estimate the probability (proportion of time) a rare event occurs. The standard MLE estimate often gives me extreme estimates since the denominator is usually 1, and the numerator is either 0 or 1, giving me either 100% or 0%.
For example, I am trying to estimate the proportion of web referrals as a result of my email campaign for each of my users. Since the events are rare, most of my users usually have only 1 web referral, and they have either 0 email referral or 1 email referral. In such cases, the MLE estimate is quite unreliable.
Are there standard tricks to correct this over-under estimation? Perhaps something like the laplace smoothing? If yes, how should I go about it?