About Lesson
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Prior Odds:
- Imagine you wake up in Finland, where the chances of rain are 206 out of 365 days (including rain, snow, and hail). This gives us prior odds of 206:159 in favor of rain.
- Prior odds represent our initial belief or expectation.
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New Evidence: Cloudy Morning:
- You look outside and notice it’s cloudy. Now, let’s consider the likelihood of clouds on rainy vs. rainless days.
- On rainy days, the chances of a cloudy morning are 9 out of 10 (9/10).
- On rainless days, the chances of clouds are 1 out of 10 (1/10).
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Likelihood Ratio:
- To compare the chances of clouds on rainy vs. rainless days, we calculate the likelihood ratio:
- Likelihood ratio = (Chances of clouds on a rainy day) / (Chances of clouds on a rainless day)
- Likelihood ratio = (9/10) / (1/10) = 9
- This means that clouds are nine times more likely on a rainy day than on a rainless day.
- To compare the chances of clouds on rainy vs. rainless days, we calculate the likelihood ratio:
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Bayes’ Rule:
- Now, let’s update our prior odds using Bayes’ rule:
- Posterior odds = Likelihood ratio × Prior odds
- Posterior odds = 9 × (206:159) = 1854:159
- The new evidence shifts the odds significantly in favor of rain.
- Now, let’s update our prior odds using Bayes’ rule:
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Conclusion:
- Even though the formula seems simple (just multiplication!), its implications are powerful.
- Bayes’ rule allows us to incorporate new information and adjust our beliefs accordingly.
- So, whether it’s predicting rain or solving complex problems, Bayes’ rule is our trusty companion!
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